GRR Valuation, page-108

Played with some figures around for both GRR (previously posted) and MGX.

The main factor for mine is the pellet price (margin) and market cap difference between the two. I personally think the Pellet price premium puts Grange in a much better position especially given the push for carbon reduction...The offtake agreement will also ensure that their product is always sold directly to the biggest emission contributor on Earth!

If you had to compare the two i think the key points to look at are market cap and margin.

As mentioned GRR is not in the 300 and MGX is, subsequently MGX benefits from index buying where GRR doesn't... I remember when RMS wasn't in any index and just started producing (different commodity), i am expecting a move from GRR similar to what RMS did in 2018 when it rerated and was subsequently included in many index's.

Again the below numbers are extremely subjective... Further my posts are not advice and are the opinion of myself only. I am not a professional investor and these are numbers that I have been playing with that are extremely subjective. None of my posts or opinions should be used as advice or to encourage anyone to trade anything. Speak to a professional as i am not one and these are just my back of the envelope musings. As always do your own research.

	ASX GRR			ASX MGX
1	Shares on Issue	1,157,338,698.00		Shares on Issue	1,187,980,278.00
2	Cash / Receivables at 31/3	$332,020,000.00		Cash / Receivables at 31/3	$412,000,000.00
3	Cash / Receivablesvalue per share	0.286882311		Cash / Receivablesvalue per share	0.346807104
4	Debt	0		Debt	0
5	Current Net Position	$332,020,000.00		Current Net Position	$412,000,000.00
6	Share Price	0.75		Share Price	0.93
7	Market Cap	868,004,023.50		Market Cap	1,104,821,658.54
8	Assumed production costs (AUD)	$120.00		(WMT FOB)	65
9	Life of Mine/Production asset (years)	10		10 years + (TBC)	10
10	Pellet price AUD	$420.00		Iron Ore Price	288
11	Earnings per tonne	$300.00		Earnings per tonne	223
12	Likely annual production rates	2,500,000		Likely annual production rates	3,000,000
13	Assumed EBIT	$750,000,000.00		Assumed EBIT	$669,000,000.00
14	Tax of 30%	$225,000,000.00		Tax of 30%	$200,700,000.00
15	Earnings after 30% tax reduction	$525,000,000.00		Earnings after 30% tax reduction	$468,300,000.00
16	Earnings per share	0.45		Earnings per share	0.39
17	Assumed PE ratio of 5	$2.27		Assumed PE ratio of 5	$1.97
18	Assumed PE ratio of 5 + cash at 31/3	$2.56		Assumed PE ratio of 5 + cash at 31/3	$2.32
19	Assumed PE ratio of 10 (life or project) + cash	$4.82		Assumed PE ratio of 10 (life or project) + cash	$4.29
20
21	40% discounton PE of 5 + cash (Iron ore price, production cost uncertainty etc)	$2.16		40% discounton PE of 5 + cash (Iron ore price, production cost uncertainty etc)	$1.92
22
23	20% discount on PE of 5 + cash (Iron ore price, production cost uncertainty etc)	$2.36		20% discount on PE of 5 + cash (Iron ore price, production cost uncertainty etc)	$2.12
24
25	10% discount on PE of 5 + cash (Iron ore price, production cost uncertainty etc)	$2.46		10% discount on PE of 5 + cash (Iron ore price, production cost uncertainty etc)	$2.22