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31/03/21
02:30
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Originally posted by OnlyTheBest:
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Below is a snippit of a summary regarding E25 from a investors group called 10baggerclub which I think all holders will appreciate. "Element 25 E.25AX Continues from strength to strength . This week the co raised A$ 35.5 million more free cash from institutions to accelerate their mining directly to phase two production in early 2022. Phase 1 production will start within a week or two. According to the DFS, phase 2 production will give E25 an NPV of A$ 1.14 billion or an approximate SP (share price) of $7.60 per share. Another way to measure its new potential value is this: By next year in phase 2 production E25 should be making around A$75 mill NPAT per year (with a 40-year mine life- which can be extended). This should allow the SP to sit on a 10 -15 x p.e. giving an approximate SP of between $5 to $7.50 per share. Our original target price was $5 per share. However, we have now increased our price target to $10+ per share. Why? The extra cash flow from phase two production next year should allow E25 to organically increase to Phase 3 production in 2023 - which will produce around $90 million profit p.a. $90 million on a 10-15x p.e should give the company a market cap of approx. $900 mill – $1.3 bill – or a share price of between $6 to $8.50 per share. Plus there is their prospective high purity manganese (HPMN) for batteries business on top of that. Part of the money raised last week is to complete a DFS for its battery-grade HPMN production this year. With that completed, we believe one of the big Asian battery or global car manufacturers should soon do a deal with E25. The deal will likely be that the big co pre-fund the HPMN plant’s Capex in exchange for a guaranteed future offtake. For example, VW recently stated that “To save battery costs, VW shall use nickel and manganese in the cells …and do without - more expensive cobalt.” In addition Elon Musk has just stated, “It is reasonably straightforward to do a cathode that is two-thirds Nickel and one-third manganese”. But where will they all get this HPMN from? The latest research note from Blackwood Securities, (who did the A$35 mill cap rise last week) notes, “Existing (HPMN) production is Chinese, the other possible sources are **on and South Africa. But supply chains must be strictly secure and E25 provides this security.” Blackwood modelled e25’s probable HPMN production at 200,000 tonnes per year which represent over $8 per share net profit to the co, and that would be in addition to the $6 per-share value of the expanded concentrate production. Therefore Blackwood, and their clients, like us, also see that E25’s carbon-free Mn in Australia represents by far the safest global supply chain available to any big battery or EV manufacturers. Their valuation of $8 per share for this new HPMN deal on to of the $6 per share from their expanded normal MN production, gives them a $14 per share price target for E25. This ties in with our more conservative $10+ per share target."
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Nice post there @only the best- that just about sums up my feelings on the SP. But, like @thealchemist , I also believe the 10x guys nor Blackstone are not counting in the continuing price increase in MN that looks like its should continue with the EV revolution. (why wouldn't it?) so I also believe those numbers can be increased upon. I saw from an earlier post that this 10baggerclub mob have been in this stock since like 10 cents a share from about a year ago? They must be creaming it by now, but still bullish?? I also gather they did great on apt, woa, kis and Man too? They seem to know what they are talking about. Are you in that group @only the best? any idea how to join up?