what ever the figure they need, they wont raise equity at these prices, if they did they would end up with $350m/$0.20 = 1.95b shares.
even with EBIT of $400m @ 3.5x = $0.72 per share.
to raise equity at those levels is too dilutionary.
i think you will see AXO trying to do some sort of deal with Chengde and RockCheck where they do some sort of project funding at prices closer to $1.
ie assume both RockCheck and Chendge stump up $175m each for 50% of the project. Then AXO will go to its bankers and raise the cash and the project will start.
if they can manage that then AXO would probably be entitled to 50% of the EBIT from Balla Balla, ie AXO would have an MC of $200m x 3.5x = $700m / 200m shares = $3.50.
personally i think thats what they will try and go for, i also noted that they say they might be able to go to 20mtpa, if that is the case the this is how it will play out.
Assume fe prices fall 20% to $115 USD per tonne. So AXO will make, 58% x $115/$0.75 AUD = $89 AUD per tonne of concentrate. therefore they will still make $89 - $35 = $54 per tonne of concentrate. $54 x 10mtpa x 50% = $270m EBIT, plus the titanium and phosphate = $400m EBIT easy for AXO's 50% in balla balla.
on those numbers the MC will be $400m x 3.5x = $1.4b/200m = $7 per share, at 20mt pa then bank on a $14 share price.
i have to say i am frustraited they didnt raise the cash earlier, the could have been commencing construction if they had some proper advisers.
as for auto, i think he has some interest in allowing RockCheck to keep soaking up stock. RockCheck is buying around 500k per day, at this rate he will be at 19.99% in no time and probably then trying to get this on the cheap.
when they get the funding from China, this stock will fly.
AXO Price at posting:
21.0¢ Sentiment: Buy Disclosure: Held
