For those lost by those ratios, Basically SXY has 5 Ferarris...

First 5 Last

Share
Profile

Follow
tt2000

4,697 Posts.

1232

31/10/18

06:30

Post #: 36324085
Share

Originally posted by tt2000 ↑

Interestingly, if Ironbark were to sell at $280M (to another buyer, e.g Santos) for 129 2P PJ = $2.17 / 2P PJ

SXY has 619 2P PJ, implying a valuation of $1,343M on our acreage. An EV of $1,343 implies a share price of $0.97 (after adding back our $60M cash).

So someone else buying Ironbark for $280M would actually show just how undervalued SXY is.

However, this flips if SXY is the buyer.

We have 619 2P PJ with 1440m shares
A shareholder with 1m shares is entitled to 0.42 PJ (or 0.42 GJ per share).

If we were to acquire for $280M, we would need to issue 700m shares (at $0.40 CR).
This would come with 129 PJ 2P
So this entitle a shareholder with 1m shares to 0.18 PJ (or 0.18 GJ per share).

Given each shareholder is currently entitled to 0.42 GJ 2P reserves, we wouldnt want to be "diluted" out by Ironbark.

This is why bidding at $100M-$140M is win win for SXY.

If we get it on par with our value per 2P PJ, then there is lots of upside if we unlock Origin's book value of $280M.

On the other hand, if someone pays above $140M, it shows how undervalued SXY is in comparison based on 2P reserves.

Expand

For those lost by those ratios,

Basically SXY has 5 Ferarris (that people are willing to pay $2.5M)

Ironbank is selling 1 Ferrari for $1M.

Either SXY's 5 are actually worth $5M, or SXY only pays $0.5M for the 1 on offer

Last edited by tt2000: 31/10/18

SXY Price at posting: 38.0¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

Reply

Top Stories

LRV

Larvotto identifies new exploration target at NSW's Hillgrove, boosting shares by nearly 20%

SVL

Silver Mines models five new calderas close to 396Moz Bowdens deposit

AVA

Ava Risk Group expands US presence with A$0.7M Substation Deal

Microcap Wrap: 5 explorers with news out today

Week 26 Wrap: Cerberus of inflation barks – rents, electricity & fuel – and world watches two elders bicker

LU7

Lithium Universe (ASX:LU7) board visits Quebec to engage key stakeholders

Wealth Within weighs in on shock 4% inflation read – and stocks that could survive the gloom

SS1

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

RCE

Recce's R327 found effective against E.coli during clinical trial

CMX

ChemX Materials kicks off first stage works at WA high purity alumina pilot