Entitlement Closed – What now for the SP?

So as we know, Friday saw the closing of the Entitlement Offer to all holders.

I thought I would prepare some crude numbers to come up with a possible share price post the impending 3B for the new shares.

To provide some background, BCI’s SP at yesterdays close was 0.195c, providing a market cap of $38mil, based on the current 196.263mil shares. In the next week, the Entitlement shares shall be issued (estimated to be Friday 18^th Nov) and the total number of shares shall increase to 392,526mil shares. Unlisted shares are currently around 8mil. Therefore, based on yesterday’s closing price only, this would represent a new mc of $78mil, which is clearly overvaluing the company.

So what will the SP revert to on issue of the new shares?

The key measures for BCI are as follows –
* EBITDA from Iron Valley
* Cash in bank
* Debt

On this basis I have come up with a share price range, post issue of shares, of 0.11c to 0.13c. This represents a mc of $45 to $50mil, which i would think to be easily on the conservative side, given the current environment.

I have applied no value to any of the royalty deals that BCI could earn income from in future, and also no value to Buckland’s, so have only concentrated on the above ‘key measures’. Interestingly, given the recent surge in the io price, as a mid-point, I have allowed for BCI’s ‘High Case’ scenario of earnings for IV, however I’m expecting a further revised earnings update from management for IV in the next month or so, even if the IO price holds at this level.

Don’t read too much into this – it has taken me all of an hours research to come to this bold prediction - it is really an attempt to encourage some forward thinking and debate, so I’d be interested in any other holder’s serious comments or considerations.

Enjoy your weekend - i would think the events of the past week or so have put a spring into holders step, and therefore there should be far more confidence in BCI's future. I can sense this 'excitement' from posters, just reading the posts from the last few days.

Confidence is extremely hard to factor into a share price.....!!!!

GLTAH.