Hi
@dangkhuat & others,
I can readily associate with your story - it rings very similar to my own. Ironically, it was the big drop in price that has made me dig and understand the fundamentals. I have often said here, the more I dig into the info, the less I can rationalise the current share price - its way under fundamentals.
Here's my take on last announcement:
Pre-announcement - 200k carats was expected as a stretch. My Market Cap expectation, all going well at auction was something like $120m - maybe up to $200m if I wanted to be optimistic. Still an 18mth $300-400m forecast.
Post announcement - 300k carats expected easy (300-500 possible), expected Market Cap post auction should be $200-300m; longer term val $400-500m easily - if not double this.
The Market also doesn't realise yet (IMO) that a great first auction result will open awesome options for the group. Additional plant, more holes, more shifts, but this leads to much more revenue for us faster.
The more I look at the announcement, the more I believe we're massively undervalued. At US$61 per carat (last GEM auction excluding corundum) we can expect US$18-30m revenue. That is simply amazing. I had a low case estimate of US$10-12m prior and now am much more comfortable we will exceed this if not double. That cash balance is the difference between meeting costs and massive growth.
I also caveat to all here, I'm only looking at worst case estimate, I actually believe we'll be over $100 or possibly even $200 per carat; but I'm trying to low ball to see if I can justify the current market cap... Nope - I can't even do that based on worst case fundamentals.
Also, I do expect a slightly lower figure per carat than most, because I believe (possibly incorrectly) that the artisinal's are of lower average quality than the plant recoveries. But this still can't explain current share price. And I'll be happy to be wrong on the $ per carat. I've discussed this with Wombat, and we're coming at the same problem from different angles - but I can see and respect his approach - in fact, I really hope I'm wrong. But, even if I'm right, the company value by my calcs is much, much higher than still reflected here. I feel a bit like a crazy person - I talk to everyone I know telling them to get on this, and very few listen, but as this rises, people are slowly starting to believe me.
The nice thing I see is a steady climb - we're not in a rush to auction - this is still 6 weeks away. Plenty more time to climb to over 20c prior to auction.
I'm now leaning to this as my current thought process.
Ironically, I feel we might go boom when the graphite JORC comes in later this month - irrelevant as it may be in the scheme of current revenues.
Finally, I believe 20c sell is now not going to be enough for me, so I'll be holding until at least 30c-40c where I
might take back my equity. Who'd want to miss this life changing journey - I doubt I'll ever see this again. I am beginning to believe over $1 per share is likely in 12-18mths.
PS -
@Davisite - I'm enjoying reading your comments, keep them coming. Just to clarify an earlier post - I didn't intend to imply CJ was suggesting Tiffanies wouldn't be at this auction at the EGM. I was implying that I felt he did expect them to be there in some guise. I might be reading too much into it & he could have been referring to the earlier discussions, but it was the vibe I took away with me and I thought the marketing supported this IMO.
Good luck and keep dreaming of rubies.
PPS - I'm looking forward to buying one of those dragonfly's (and a mustang car) when all is done - they look really nice and Mrs CaptAmazing has put up with a lot to let me ride this through the last 6mths. Disclaimer:This is not financial advice, and I'm not really a Captain or super-hero.
Cheers
Capt Amazing
(and sorry this was so long)
