STB paid $30,000 (yes thirty thousand dollars) to acquire Colluli in an open tender, and spent $500k on it in the first year. Source. Another ASX company paid an estimated $400m ($260m cash + lots of shares) to get a slightly bigger resource (target only). STB should be worth significantly more because it is cheaper to mine, lower capex and opex. To value STB based on current purchase price, we use a conservative figure of $400m and 85ms (app 3B 2/3/2011), we have an SP of $4.70 per share. Add in the $ amount of drilling todate, Duketon Nickel and Rosie gold; STB is undervalued at today's price of $4.40.
STB capex is expected to be $1b lower than other deep deposits, so it would not be too outrageous to add half of this savings to the conservative market value of $400m to get a more realistic value of Colluli. For the SP, you need to work it out yourself.
STB Price at posting:
$4.40 Sentiment: LT Buy Disclosure: Held
