What sort of chart is that Mongoose? Does your chart resemble a...

What sort of chart is that Mongoose? Does your chart resemble a crystal ball, and if so can you please share it with others.

Anything is possible but I prefer to base my investments on numbers. So lets look at a simple back of a napkin valuation...

Assuming FY19 earnings of $25m from Mount Marion and after applying company tax rates and overheads (lets say 45%), that leaves $15m of earnings. $15m equates to an EPS of 2.8 cents per share.

Now applying a conservative PE ration of 10, then that puts us right where we are now a value of 28 cents per share. Importantly this excludes the cash on hand and excludes all other assets or projects in the valuation.

Its worth noting similar companies would trade on a higher PE ratio putting the valuation somewhat higher. For example a PE of 14 would place the valuation at approx 39 cents per share. Now if the earnings from MM were say $5m less, at $20m for FY19 then the valuation (using same metrics above) would equate to an EPS of 2.2cents per share and with a PE of 14 we are right back to a value of 30 cents per share.

So whilst anything is possible eventually the share price will closely follow the profitability of the company.

Honestly with no news, like all shares the trading patterns are all based on pure speculation. The timing and execution of their projects will determine the share price in due course.

FY19 for Neometals is an exciting time, so stay tuned and in the interim I’ll hold onto my shares and if your charting techniques come true then I'll be sucking them up like a vacuum.

Finally I'll part with some wisdom of my own. I can guarantee that at some point these shares will rise and at some point they will fall.

(PS - I've got nothing against charting and technical analysis here folks just like to bring some common sense to the debate)