alright, here you go
- comparing production and current resource to other international pure play diamonds miners, LOM appears overvalued at usd72m (aud102m), same.with Burgundy Diamonds, must be some euphoria amongst aussie investors
- diamond miners are being valued via dcf rather than yield, so talk of a 20x P/E is crazy
- I expect Merlin to support a USD$150 - $200m market cap once fully funded, representing a 3-4 x multiple on ebitda or discounted NPV including an additional 30% risk charge
- the risk charge reflects the same MC vs NPV differential for Lucara and their Karowe mine, and that is fully funded with a $220m debt facility
- given bond yields are increasing debt might seem undesirable if there is no confidence to rollover
- therefore I expect there to be a mix of a capital raise 75m and debt 25m to fund merlin dev, leaving an potential payoff for investors here of 2 bags at most, if they can get more debt then maybe 3 bags
- lulo value is minimal with 140k cts
anyways thats on current assets, the only thing that will support a 20x bagger is finding that motherload, but best to spread your bets across other explorers, there are some comparitively cheaper plays out there
