In a previous post Moneymaker is predicting shares will be 50c...

In a previous post Moneymaker is predicting shares will be 50c in 3 years.

Assuming the mine goes ahead (Dart's goal is to be producing by mid 2016), with the shares currently on issue @ 50c a share that would give a market value of slightly less than $100 million.

This would be an absolute steal, that is unless there is absolutely massive dilution.

Red Kite is prepared to pay $8.5 million for 3% of future royalties (and this is before a full banking feasability study has been done).

If you multiply 3% by 33.3 you get pretty close to 100%. Thus $8.5 million multiplied by 33.3 comes to about $283 million.

If one recalls from the previously published scoping study, with a 14 year mine life the project has a NPV of $255 million. There is now talk of a 20 year life, if this occurs then it adds an extra $50-$70 million NPV.

In this context the $8.5 million payment seems close to the mark, of which, the first payment from Red Kite is coming in before the end of the month.

To me it seems although the market isn't recognising Dart's worth, Red Kite is.

Assuming the mine goes ahead. Dart has already stated in its scoping study that the mine construction costs of $304 million will have less than a 2.5 year payback. This implies profits of more than $120 million a year.

By 2016, do you honestly believe if a company is making more than $120 million a year (with a possible 20 year mine life) that it would be valued at less than $100 million (50c a share)?


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This isn't financial advice, so please do your own