Thought it's worth sharing this here which I posted on the ADN forum, I've updated the numbers for MEP's 25% of the JV.
My conservative in-production share price is below, noting the following key assumptions:
- Includes Great White and Hammerhead
- This forecast assumes 100% of the resource is used for ceramics, i.e. it disregards applications for concrete, nanotech, HPA, coatings etc
- $700 price per tonne for 100% of the resource (this is the low end of the mentioned $700-$1200), AISC as per the PFS at $354 per tonne
- Capex is phased as per the PFS with an additional 20% increase to be extra conservative. Note I haven't applied any sensitivity to the AISC due to the belief that the number will in fact reduce in the DFS
- I've applied a 50% margin of safety. I haven't applied a higher % as the project has been de-risked sufficiently for me at this stage (I would even be comfortable with 25% for Great White and 50% for Hammerhead)
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My share price forecast at a PE of 25 is $0.68. Let me reiterate again, that this assumes the only application is ceramics. To give an idea of sensitivity to this number, if I reduce AISC to $254/t, take off the capex sensitivity, and remove the margin of safety, the share price is $1.76.Why do I see this post as important?
Simple, for me it's the absolute minimum target I'm expecting based on all the information we have, and continually gets de-risked further with each announcement. It's also the reason why I honestly don't care about daily share price movements, and care very little for downrampers, I've never held a stock with so much conviction.
So for me any of the following are catalysts for a much, much higher share price:
- Concrete applications
- Polymers and Coatings applications
- Nanotechnology applications (carbon capture, water remediation, hydrogen storage etc) - Importantly MEP has 50% ownership of the IP
- HPA applications
- Camel Lake deposit
- Bronze Whaler deposit
- Tiger deposit
- Higher PE (peers average 30)
- Lower AISC
- Lower capex
- Higher price per tonne for ceramics
- All other deposits MEP has that aren't related to the JV with Andromeda
Add several or all of the above in and you can see why I've never been so confident on a stock.
This is all just my own opinion, everyone should do their own research and have their own targets.
