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meerkat1

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24/03/21

20:54

Post #: 52016839
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Originally posted by Merlin1066: ↑

meerkat,
I'll try to keep this explanation simple, although I mean no offence.

Going by the PFS, if ADN is generating $40m profit per year and there are 2.5billion shares then each share is generating/earning
40/2500 = 1.6c profit each year over the Life of Mine (26 years).
Using a PE (Price Earnings) of 20x this values each share at 1.6c x 20 = 32c, or about what the shares are currently on market.
However, the PFS only allows for 233,000 tones per year of production at $700 per tonne.
Taking out costs this makes about $40m profit each year.
But, if ADN decide to produce say 466,000 tonnes per year then the profit and hence profit per share is doubled to 3.2c per share which, with a PE of 20, suggests a share price of 64c.
But, if you then use a product price of say $1000 per tonne and producing say 500,000 tonnes per year of product then the profit per share is 4.6c for a share price of about 91c.
They have letters of intent (LOI's) for nearly 1 million tonnes of product per year so theses numbers I've used are still conservative.
None of this allows for any of the other "Blue Sky" opportunities which Natural Nanotech may discover. Nor does it allow for any additional production from Mt Hope or Camel Lake or the other prospects.

As for Tesla or Afterpay - I have no idea so can't help on this one.

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Thanks Merlin1066!!
Yeah... PE appears to be a tricky thing and the revenue is unknown until it happens. Also, PE/revenue will vary over time even when making profits. So, I prefer just waiting for dividends.

@ohyeah76 Sorry, the replies didn't work for me. I saw it when typing but I do not know how it got disappeared.

ADN Price at posting: 34.5¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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