PPK Valuation Perspectives

Hi all,
My observation is that many posters and threads, while offering insights and news on the business and prospects of PPK, do not actually offer an opinion on the valuation of the business. So I thought I'd share my thoughts for others to critique and hopefully to catalyse others to contribute theirs also.

For clarity:
1. I am a holder and was fortunate enough to have come across PPK, conduct my research, and purchase before the recent run up of price. I bought in around $7-8
2. I am a bottom-up value investor.
3. I like a margin of safety between value and price.
4. I don't care about price movements except to the extent they allow me to purchase and sell equities below or above my assessment of the business value.
5. I make mistakes.
6. My modeling is rough and conservative.
7. Key inputs and assumptions to my model are as follows:
A. production rate = 8kg/wkx50wk/yr = 400kg/yr
B. sale price is USD900,000/kg but decreases per year
C. USD/AUD remains constant - noting that if the AUD weakens from 0.70 then this improves Australian shareholders
D. a variety of ratios that of course will be wrong, but meant to approximate the outcomes. We should note that PPK's BNNT production is a low capex business (therefore low D&A expenses both of which have been rolled into the expenses row)
E. Ignores PPKs many other JVs (including the mining business) and BNNT applications other than the LIS one
F. LIS P&L is a wild a$$ guess - even their prospectus didn't have any forecasts - I've sought to be conservative
G. I've used a 15% discount rate
H. I've used 15x termination multiple
I. I've used standard 30% tax rate.
J. I've modelled for 10 years
K. grey boxes are primary inputs. green are primary outputs
7. Yes modelling is easy this way, but I am happy with the granularity of the model. My view is that there's no need to be precise with such models, -only accurate. If there is clear evidence that the business is a good one, and that the price at which I can acquire a part of it (shares) is significantly below its intrinsic value, then I'm interested.

I welcome your contribution and constructive criticisms and hope to prompt others to share their views on valuation with their workings.