- looks like they are going to amalgamate with other resources in the area to boost total resource. - I assumed 70% MHM, 30% other - yes the Capex being floated around is at $500M - from here I want the other way and asked what return or payback would the new company want on its capex. Probably a high of ten years to a low of five years. For arguments sake lets say seven. - we then end up with an EBITDA of $500m/7 = $70M - say half debt funded - therefore interest cost = $20M - Net profit before tax = $50M - Depreciation on $500M would be $25-40M so negligible tax (say) $10M - Therefore NPBT = $40M. PE ratio of 12 = $480M market cap. - Agree that the company holding the resource would be 20-25% and then take 70% of that = 15%. I have major at 40% and IPO at 45%. To attract investors and taking into account 2-3 year build forward PE say at 8 therefore new company floated at $320M - IPO raises 45% = $144M + $128M from major shareholder (40%) = $272M which is roughly half the value of the required capex which agrees to my earlier assumption.
So a mc of $320M of which MHM shareholders receive 15% = $48M = about 35c/share.
Now probably more by good luck than good measure but basically get about the same as you Investorpaul but by using another method,
Spozzie
MHM Price at posting:
83.0¢ Sentiment: Buy Disclosure: Held
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