MMR - The numbers, parity, and forecasts

What is parity for MMR based on the current BPH SP?
What is the upside?
What is a fair SP for MMR with the CGT exemption?

Parity for MMR is based on two (or three) ratios being applied to the current BPH share price.
1. Comparison of the SOI for each stock, discount applied to MMR due to higher SOI
2. Comparison of share of ownership % of PEP11, mulitplier applied to MMR
3. Value of the MMR CGT exemption, mulitplier applied to MMR

Parity without CGT exemption:-



Parity can be used to forecast based on historical BPH movements. I have revisited to the two recent highs for BPH and calculated the peak MC based on the SOI at that time, revised the SOI for current levels, which forecast SP movements if those highs were repeated:-



Context:-

The December 2023 peak came approx. 2 months after NOPTA handed their post Scomo recommendation to the Joint Authority. SH considered that (a) the Joint Authority were in a position to hand down their deicsion, and (b) that the period post Parliamebt resting was an optimum time for an announcement. Subsequent disclosures from FOI releases, research completed by SH, and public statements from MPs altered that view. It became apparent that the ALP were not going to follow due process, were not going to follow the law, and that their pecuniary interest would see them refuse the applications. The SP naturally declined as a result until the inevitable announcement in September 2024. I see the December 2023 as a conservative baseline current forecast.

The January 2021 peak came approx. two weeks prior to the Year 3 work program expiry date, a key date. Several MPs had made public statements that they expected a decision by 12th February 2021. The SP increased dramatically in anticipation of Keith Pitt approving the NOPTA applications. Keith Pitt would later tell Nikki Savva, as published in her book "Bulldozed" that he considered publicly announcing PEP11 approval. $12M had been raised in readiness for the drill, gains were held until 4th March 2021 when Scomo publicly stated he was against PEP11, with denial eventually being announced in December 2021.

Today, expectation is centred around the current Federal Court case reaching a favourable resolution, either by mediation or via a judgement derived from a two day hearing commencing 16th September 2025. Publicly available evidence (Caucus policy, EMP precedent, and Pathfinder principle) points to the Government losing the case. A win for the PEP11 group will return the playing field back to the same siutational position of January 2021 and December 2023. In addition, it has since been publicly confirmed that NOPTA has recommended approval of BOTH applications, and the wholesale price of gas has seen increases of between 100% - 400% since.

Are these forecasts realistic?

Market Caps of $175M plus come in well below the "in ground valuations" published by other forum users. I run my own fully risked IGV (unpublished) which is a little more conservative (lower $/Gj, higher risk weighting) which also exceeds the $175M MC level for both BPH and MMR.

Want to include the value of the MMR tax exemption?

Assuming a hold period of less than 12 months (no CGT discount) and a marginal tax rate of 45c/$, the MMR parity share price is as follows:-



MMR closed at $0.007, a substantial discount to parity on both the inc and ex CGT tax benefit parity comparisons.

I expect the MMR SP to converge towards the current BPH SP over time.

What is the TA suggesting? With credit to @Patterns




IMO, "Stockmarket Nirvana" is when the FA and the TA align.

Full disclosure - I hold MMR and BPH, skewed to MMR for the CGT exemption.

***The above is posted for information sharing purposes only. It is not, nor is it intended, to be considered any type of financial advice or recommendation. Readers should DYOR. GLTAH.