Hi Dalley,To be truely accurate the first question and most...

Hi Dalley,

To be truely accurate the first question and most important question is whether to use PE multiples or discounted cashflows to arrive at your project valuation and subsequent sp.

Many investors get this basic question wrong but in essence if you have lumpy cashflow as with the start up of a busniness discounted cahflows are the correct way to go. if however you have steady income streams you can revert to PE multiples.


On your specific question - PP has put us right with shares to be issued on the BV purchase so lets say with needed working capital we are up to 100m shares on issue then EPS on your calcs would be 0.33c - once the project has been running for 18 months and once the margins have been maintained with some consistency then EPS (to avoid doubt this is net profit after tax) multiples of 8 -10 would be conservative.

At this stage however I would use discounted cash flows for a valuation.


Spozzie

Spozzie