My conservative in-production share price is below, noting the following key assumptions:
- Includes Great White, Hammerhead and Mount Hope
- This forecast assumes 100% of the resource is used for ceramics, i.e. it disregards applications for concrete, nanotech, HPA, coatings etc
- $700 price per tonne for 100% of the resource (this is the low end of the mentioned $700-$1200), AISC as per the PFS at $354 per tonne
- Capex is phased as per the PFS with an additional 20% increase to be extra conservative. Note I haven't applied any sensitivity to the AISC due to the belief that the number will in fact reduce in the DFS
- I've applied a 50% margin of safety. I haven't applied a higher % as the project has been de-risked sufficiently for me at this stage (I would even be comfortable with 25% for Great White and 50% for Hammerhead and Mt Hope)
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My share price forecast at a PE of 25 is $0.65. Let me reiterate again, that this assumes the only application is ceramics. To give an idea of sensitivity to this number, if I reduce AISC to $254/t, take off the capex sensitivity, and remove the margin of safety, the share price is $1.68.
Why do I see this post as important?
Simple, for me it's the absolute minimum target I'm expecting based on all the information we have, and continually gets de-risked further with each announcement. It's also the reason why I honestly don't care about daily share price movements, and care very little for downrampers, I've never held a stock with so much conviction.
So for me any of the following are catalysts for a much, much higher share price:
- Concrete applications
- Polymers and Coatings applications
- Nanotechnology applications (carbon capture, water remediation, hydrogen storage etc)
- HPA applications
- Camel Lake deposit
- Bronze Whaler deposit
- Tiger deposit
- Higher PE (peers average 30)
- Lower AISC
- Lower capex
- Higher price per tonne for ceramics
Add several or all of the above in and you can see why I've never been so confident on a stock.
To answer @Yagami specifically. It's difficult mate to determine what is priced into the current share price, whether it's the 3 deposits with the assumptions above and a PE of 15-20, or maybe the market is only valuing Great White but including some of the higher value applications. Whatever it is, I'm not fussed because the project has been de-risked enough for me to set an absolute minimum, very conservative target.
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