Now that NSL have highlighted their ability to achieve AUD$65 per tonne in the current domestic market, I did the calculations and realised that we currently have the ability to achieve over a AUD$1 share price in less than 5 years time if everything goes to plan.
This obviously takes into account an element of speculation and the idea that after 2019, the company would proceed to expand at 2mtpa in order to achieve their five year MoU goal of over 8mtpa. This goal was also set a year or two ago, but that doesn't change the fact that it is still a goal in the sights of management and is not even the end goal.
Based purely on the economics of the existing expansion plans, there is no reason that the company can't achieve the below outcome. Things such as PE ratio, additional costs etc will all have an impact, but just looking at the pure figures really highlights the long term potential that has already seen the share price achieve a Disallowed from the lows of 0.4c.
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- This does not take into account the 50% free carried JV with the multibillion dollar Chinese Wei Hua Group.
- This does not take into account the potential 1mtpa (based on size of land allocation using previous allocations) pellet plant to be built at Orvakal to feed the steel mill.
- This does not take into account the potential second MoU with the State Government of AP to assist with either supply and/or construction of an integrated steel plant in the Kadapa District.
- This does not take into account progression and development of the AP14 tenement located in Telengana and named a"critical project to the national interest by the Government of India".
- This does not take into account the potential definition and subsequent development or sale of the Queensland Coal assets held by the company.
This company is no one trick pony and are continually working towards their end goal, having already achieved the prestige of being the first and only foreign company to produce iron ore in India.
Investment culture and policy in India is slowly opening up to the world and embracing FDI to achieve economic success. This is evident from the media, policy changes and "Made in India" campaign.
I like a lot of shareholders, especially those who have held longer than me can be proud of the following. This is no longer a spec stock. This is not an explorer with a massive lithium JORC resource in Western Australia competing to get to market. This is not a tech stock hoping to be the next big thing in a new industry. This is not a company hoping to find something big in the ground that they can sell before production.
This is a company that have slowly chipped through the old red tape, whom have finally worked their way through the systems of India and are finally after all this time a
real producer with
real clients.
You need money to make money. That is the absolute truth for month, unless you are a super inventive entrepreneur, but even then you usually need other peoples money to make money. We now have
no debt,
cash flow and
friends in both
India and
China that want to make this all happen as much as we go.
China want their steel mills to setup overseas and
stop producing domestically.
India want their companies to
stop importing steel from China and start
buying domestically. We are going to help both countries make that a reality.
Those who doubt NSL, sometimes purely because of "India" and have doubted it since 0.4c will likely continue to doubt it when it one day potentially reaches 40c, a dollar and then perhaps even $4 if the steel mill(s) are built and NSL achieve their goals over the next 5-10 years.
Everyone likes to compare companies to FMG, however I want to compare it to Twiggy Forrest. For a long time he went around trying to get investors and shareholders to help make his dreams a reality. Those who followed him ended up rich, those who turned him away to this day probably regret doing so.
My dad once told me about a man he knew who was having a smoke when Twiggy walked up to him and joined him. FMG was not big yet and he apparently said to the guy, buy FMG and you'll be a rich man one day. The guy him a few years later one day onsite at a job, while he was working. Twiggy and the man recognised each other and Twiggy asked him if he ended up buying any FMG like he suggested. He did not and to this day regrets it as he could have been a millionaire if he had done so. That's hindsight and happens to all of us.
The point of the story is, some people look at an opportunity and look no further, others take a leap of faith in someone in hope that they are onto a truly good thing. It doesn't always end well, but that's life. So after the story, I said to my dad, maybe I will give you a stock tip like Twiggy did and you'll end up a millionaire.
No lie, he says to me, perhaps you already have. Now I
wish he was referring to NSL when he said it, but he was actually referring to POS hahahahahahaha however he's made his money back several times on NSL, despite the fact that he is still down on POS, so in the end what he said is potentially still true if NSL continues on the great path it has set off on. Who knows, maybe even POS will be green for him again one day.
Disclaimer: I don't give my dad unlicensed financial advice and you should
always speak to a professional.
For those who are yet to look into NSL and do their own research, I believe in NSL and I hope if you look into the company well enough, you will see the same long term potential that I continue to see on a daily basis.
