Annnnnnnddddd Read the following 10 times before you go to bed, and 10 times when you get up in the morning.
And stick to the above program daily, until the Assays come out for all 250 holes!!!
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Fatstocks has done a more detailed review of fms implied value and posted it on the maximus thread. Whilst it identifies my thoughts on both FMS and MXR, the figures I have used to identify the implied value of Flinders hematite illustrates there is a lot of room for an increase in the FMS share price and market cap......whilst I have been selling some FMS to increase my stake in MXR, the figures below might be of interest to Flinders shareholders. It's a long post but for those with limited time, the relevant paragraph from a Flinders fully diluted perspective, suggests FMS could be worth 83c a share if tenement 882 is on sold which is significantly more than the current trading range.... From the post..... "From a fully diluted leverage point of view.... FMS current share price of 16c to implied value of 83c (fully diluted) = 5 times current share price FMS with an extra 300mt from the new tenement works out at 600mt X $4.10 divided by 1,474m shares ( fully diluted) =$1.67 = 10 times current share price"
It's worth keeping in mind that Flinders has a large percentage of the small number of MXR shares listed.
For those with time to read the full post.........
"As a long term shareholder in Flinders Mining and a more recent shareholder in Maximus Resources, I have reviewed the current major iron-ore resource targets of both companies to try and get an idea of the comparative value of each as they have different types of ore ( one being hematite the other magnetite).
A few assumptions to start with...... Please do your own research I have not included cash or debt or assets/ liabilities of each company The comparison is based on conceptual targets and there are many factors which could vary the figures. Both FMS and MXR have major drilling campaigns under way at the moment and are expected to announce resource estimates in the next couple of months.
In ground value assumes a sale of resource without production capex, i.e., as is, where is and is based on a resource or a target resource becoming JORC'd as an inferred resource tonnage ( as a minimum) I have read a lot of reports with different theories about how an in ground iron-ore resource value is established but the best I have seen recently, that is both conservative and creditable, is that used in the Ocean Equities latest report on iron-ore juniors in the Pilbara and Mid West which uses $4.10 per tonne for DSO hematite and 26c per tonne for magnetite. These are on the low side and any advancement in resource through to production adds a higher value per tonne. From what I have read, the Ocean Equities report is the most accurate basis upon which Flinders and Maximus can be valued at the moment.
Existing shares on issue ( approx') FMS 1,111,000,000 MXR 153,000,000
Resource target ( estimate only) FMS 300mt hematite Fe (tenement 882 only) MXR 1,700mt magnetite Fe ( low target estimate)
Implied In ground value of Fe FMS @ $4.10 per tonne x 300mt = $1,230m MXR @ 26c per tonne X 1,700mt = $442m
Implied Value per share FMS $1,230m divided by 1,111m shares = $1.10 per share MXR $442m divided by 153m shares = $2.88 per share
Adjusted Market Capitalization FMS 1,111m shares X $1.10 = $1,222,100,00 MXR 350m shares X $2.88 = $1,008,000,000
Adjusted share price on an equal number of shares basis FMS 1,111m shares divided by differential of 3.17 = 350m shares or $3.48 per share ( $1.10 X 3.17) if FMS had the same number of shares as Maximus MXR 350m shares multiplied by differential of 3.17 = 1111m shares or 90.8c per share ( $2.88 divided by 3.17) if Maximus had the same number of shares as Flinders.
Notes......
Fully diluted, both company's have options outstanding which if converted will dilute the figures. FMS has about 363m options which if all are converted , would see about 1,474m heads. MXR has about 72m options which if all are converted, would see about 226m heads.
The new figures for FMS, if the options are converted, would be ....$1230m divided by 1,474m shares or about 83 cents per share without adding the new tenement value. If FMS also has another 300mt of hematite in the new tenement to the south, the value per share could be $1.66 per share for the in ground hematite once options are included in the scenario.
The new figures for MXR, if the options are converted, would be... $442m divided by 225.8m or about $1.95 per share without adding any value for any increase in the canegrass magnetite target tonnage above 1,700m t ( the company has published a resource target of up to 3,000mt but for the purposes of the comparison I have used the lower figure of 1,700mt) If the higher target of 3,000mt is JORC'd, MXR's in ground value using 26c per tonne of magnetite becomes 3,000m X 26c = $780m divided by 225.8m shares ( with all options converted) = $3.45 per share.
It's worth a lot more per tonne of it is mined (hematite sales are worth about $40 net per tonne as opposed to $4.10 per tonne in ground) but there is of course a lot more capex' and finance costs to consider and a much longer period before revenue from sales is achieved. I haven't worked out the sales of magnetite as a net $ value per tonne.
From a fully diluted leverage point of view.... FMS current share price of 16c to implied value of 83c (fully diluted) = 5 times current share price FMS with an extra 300mt from the new tenement works out at 600mt X $4.10 divided by 1,474m shares ( fully diluted) =$1.67 = 10 times current share price
MXR current share price of 11.5c to implied value of $1.95 ( fully diluted) = 17 times current share price MXR with the higher tonnage of 3,000mt X 26c = $780m divided by 225.8m shares (fully diluted) = $3.45 = 30 times current share price.
I have been selling down my position in Flinders and increasing my position in Maximus as a believe, whilst there is good value in Flinders, there is potentially better leverage and value in Maximus.
These are just my thoughts, Please do your own research I have not included cash or debt or assets/ liabilities of each company The comparison is based on conceptual targets and there are many factors which could vary the figures."
-------------------------------------------------------------------------------- Cheers Fatstocks, [email protected] Before acting on any of the information you read and making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts. These comments are for discussion purposes only and are not advice or recommendations. Comments may have typographical and spell errors. I have interests in GDA,GDAOC, MXR,MXROA, GPNOB , MNM and MNMO.
FMS Price at posting:
9.0¢ Sentiment: Hold Disclosure: Held
(20min delay)