Let's lay it out there, even with "bad" assumptions.Cap raise...

Let's lay it out there, even with "bad" assumptions.

Cap raise dilutes by 100+% (no interest) (Yes, EBITDA, not NOPAT)***
(Future EBITDA limited to 427 mn p.a. per Bell Potter analysis, cannot increase net cashflow/profit)
(Taxes - complicated in Australia given dividend taxation)
(Depreciation benefits would exist but be low (maybe high, depends when plant is built)
(Amortisation ???)
10 years to develop (not likely given critical mineral, quality, quantity, nearness to water, ports, etc)
15% discount rate, used for IRR, perhaps realistic to screen investments, but cost of capital is much lower

427 mn / 140 mn shares ==> is a whopping $3.05 per share ( so let's strike croc's "This will go down to $3" idea off the record).

Anyone taking 2.3 times EBIDTA / ps ($7) for a TO price is completely off their tree. Anyone who thinks the sp is only worth 166% of EBITDA may think FMG should be trading at $12.

Even at a low forward PE of 10***, this is worth over $30, with rather heavy future discounting & overly pessimistic time-to-mine production already priced in.

Even at 7 years until production cashflows, this baby then ramps up to a realistic forward pricing of $45.

Hence why I think $38 is a reasonable price, but it is possibly worth more than $50.

***The mining industry PE ratio is over 20 now, BTW.