This needs to re-rate to $1.20 - $1.50 for the following...

This needs to re-rate to $1.20 - $1.50 for the following reasons,

Comparable Valuation
- Average EV/EBITDA of global peers is (+) 6x EV/EBITDA
- I would argue these peers are of lesser quality on a historical and forward looking basis

Precedent Transaction
- As stated above Devico was priced at 12.8x
- One would argue that Imdex overpaid nonetheless this can be used as a precedent

EV/EBITDA (x)
- Averaging the comparable and precedent transaction multiples delivers EV/EBITDA (x) = 9.4
- To be conservative I will apply a discount of 40% = 5.64x
- DDH1 trades at 3.11x implying 81% upside
This upside only relates to multiple expansion and does not consider,

Earnings expansion from two themes

Gold (34% of commodity exposure)
- Investment demand for Gold will continue to increase as real interest rates trend negative from a FED pivot
- Physical demand for gold expected to increase as China reopens
- Therefor Exploration/production expected to increase and remain elevated

Iron Ore (19% of commodity exposure)
- In recent months we have seen Iron Ore prices and volumes re-rate
- Over the short term demand for Iron Ore driven by Chinese imports is expected to increase and remain elevated

One can assume these variables should increase rig utilisation given DDH1s specialist services increasing ROA and Free Cash Flows. This could surprise on the upside if the earnings expansion plays out as mentioned.

Lastly,

Takover target
- If this gap between intrinsic value continues I expect either a US or Canadian trade buyer will attempt an on market takeover to achieve multiple arbitrage from consolidating DDH1 into their business

Ultimately there are multiple catalysts to close price and intrinsic value. I would also argue that the downside is relatively limited assuming the above commodity and capital markets remain supportive.