Hi Jay I recently did a blog post with analysis of TRF (and by necessity it included analysis of IFE's project). I concluded that TRF is clearly the one to buy.
I think you're forgetting that TRF owns half of IFE, so every 1 million increase in MC by IFE, TRF gets (in theory) a half million dollar increase in MC.
An easier way to point this out is in your initial two lines, TRF owns 60% but IFE owns 80%.
"80% = 40Mil profit pa to IFE (-5mil) 35Mil pa 20% = 10 mil profit pa to TRF (Yet TRF would be higher as they pay ZERO costs), so we will add 5Mil. (15mil pa)
Now simplistically on the one project on a PE of 20- as huge growth and proven resources... Double or more the following year. Then on and up from then on.
IFE= 35 x 20 = 700Mil MC TRF= 15 x 20 = 300Mil MC"
Your calcs for MC are incorrect, TRF doesn't only own 20% of WH, it also owns 50% of IFE, so the MC's would read:
IFE= 35 x 20 = 700Mil MC TRF= 300Mil MC + IFE/2 (or 350 million) = 650 Mil MC
So you're only "missing" out on 50 million if IFE increases by that much, offsetting this is TRF's ROL shareholding, at current prices worth 14 million in MC, by the time IFE increases in value by 14 times, you'd have to be expecting ROL to at least triple in MC to 240 million MC (easily done imo, no JORC status as of yet, and still a very small tightly held register).
No sentiment because I believe that TRF is the better of the two to buy at today's ratio, read blog post (URL in signature) for a more detailed explanation.
TYX Price at posting:
96.4¢ Sentiment: None Disclosure: Not Held
