GRR Valuation, page-413

I've gone back to the days when 62% iron ore price was around US$65, in 2018. In the June 2018 quarterlies, GRR was getting around US$101 (A$134).

I would say that would be close to worst case for us. In the most recent quarterlies, the cost was A$90 cost, we would be making A$44 per tonne. At 2.6 million tonnes, that's EBITDA of A$114m under a worst case scenario.

GRR's current market cap is $730m. It has $500m of cash/receivables, giving an Enterprise Value of $230m.

If the average September quarter, 62% price is around US$100 (current price is US$130) we will be making close to A$110 per tonne (A$200 revenue less A$90 cost). With 600kt, that's another circa $60m of cash, leaving an EV of $170m.

With a worst case scenario, where we have EBITDA of A$114m, we will have an EV/EBITDA of 1.5X.

That is ridiculously low for a worst case scenario.

If iron ore prices stay low, I can see this going to 50 cents, but it would have to be one of the best valued stocks in the ASX