For what it is worth, the following are my assumptions and assessment of MGX valuation:
FY22 - I am using a 65% Fe average price of USD150/t, a 60% Fe price of USD100/t and a 58% Fe price of USD72.50/t with a AUD/USD rate of 0.75. I am assuming MGX ships 1,400,000t of 65%, 600,000t of 60% and 1,000,000t of 58% and has direct costs of AUD77.50/t plus a further $15.0m of administration expenses.
The above throws out an EBITDA of $208m for FY22 and a NPAT of about $82m (so current market value would equate to 2.7x EBITDA and 6.8x PE). However, if I leave aside the cash pile and value earnings (NPAT) at 6x the underlying EV of the mining operations is $492m plus $365m of cash = $0.72 cps valuation.. If I value the mining operations at 5x EBITDA, then the value is $1,040m plus $365m of cash = $1.18 cps.
FY23 is where it gets more interesting: I am using (what I think) are conservative forward IO prices - 65% Fe average price of USD130/t, 60% Fe average price of USD80/t and a 58% Fe average price of USD57.50/t with a AUD/USD rate of 0.75. I am assuming MGX ships 3,350,000t of 65%, 250,000t of 60% and 1,000,000t of 58% and has direct costs (post all the stripping costs that are contained in FY22) of AUD57.50/t plus a further $15.0m of administration expenses.
The above for FY23 throws out an EBITDA of $403m and a NPAT of about $202m (EPS of about $0.17 cps). If I leave aside the cash pile and value earnings (NPAT) at 6x the underlying EV of the mining operations is $492m plus an estimated $445m of cash = $1.40 cps valuation.. If I value the mining operations at 5x EBITDA, then the value is $1,040m plus $365m of cash = $2.07 cps.
Trust this is of interest to others and happy to hear alternative views on prices, costs and volumes. I have no special knowledge here, but seeking to apply my analytical experience with some "guestimates" plus whatever public data I can find.
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