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2.90%

$2.34 pilbara minerals limited

Fair Value calculation which justifies $4 target, page-93

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Hittman

2,833 Posts.

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16/09/17

14:36

Post #: 27264792
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Originally posted by Just_a_guy ↑

On an ongoing basis, and just to add to what Binwood was saying, essentially you have the operating cash flow which includes tax paid and finance costs/interest paid, then you take away the money spent on maintenance capex. That leaves you with Free Cash Flow. The FCF yield is arguable the most important metric of any for all mature businesses and doesn't get affected by non cash items/tricks of accounting.

A company will usually do one of a few things with fcf:
1) growth capex, i.e drill some more holes or build a conversion plant
2) acquisitions i.e. buy some more land
3) pay dividends
4) pay down debt

As binwood said, PLS will be paying down debt aggressively which in turn will reduce interest paid and increase OCF. At some point they will then start instituting a dividend. That decision is a while away and will be a big decision for management and will inform us about their allocation of capital.

Might be worth looking at the cash flow statements for a few other miners to see what they look like. Unfortunately most of them have very high capex, which means the money available for returning cash to shareholders is often compromised.

All the best.

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I would not expect to see dividends until after 5mtpa is achieved.

PLS Price at posting: 55.5¢ Sentiment: Buy Disclosure: Held
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(20min delay)
Last $2.34		Change -0.070(2.90%)		Mkt cap ! $7.076B

Open	High	Low	Value	Volume
$2.44	$2.45	$2.31	$44.18M	18.69M

Buyers (Bids)

No.	Vol.	Price($)
70	389291	$2.34

Sellers (Offers)

Price($)	Vol.	No.
$2.35	206394	72

View Market Depth

No.	Vol.	Price($)
71	559385	2.350
77	655407	2.340
28	343223	2.330
28	384860	2.320
22	438711	2.310

Price($)	Vol.	No.
2.360	560957	93
2.370	427950	35
2.380	142211	20
2.390	213713	20
2.400	408295	28

Last trade - 15.22pm 10/09/2024 (20 minute delay)

PLS (ASX) Chart