Doing the exercise is like trying to solve a favourite mystery event or figuring out a captivating whodunnit. The clues and evidences are laid out already. Just need to see how they fit together.
The proposed milestones are most helpful for breaking down a complex future outcome into several workable parts so that each could be considered with due focus and minimal tangential thoughts arising. That’s pretty much how the college taught us to sharpen our critical analysis skills when it required a 10,000 word essay assignment on a dreadfully uninspiring topic.
Currently, I’m trying to map out three inter-connected factors. They are quite enmeshed with each other, more so than any others, being: SOI - Funding - Partial divestment. Being enmeshed, it’s tricky to separate them and compartmentalise each one into logical stages. Maybe others can see where I cannot.
Until the DFS is ready, for now the longterm unchanging Pole Star position is the PFS after-tax NPV7 of approx. $5B, and disregarding all the short term noise.
If current SOI is more or less retained as is, give or take, then the sp has to be rerated tremendously. A gob-smacking rerating by the sharemarket.
When funding is obtained, then it will be based on such a SOI. That means the financiers will also rerate the sp accordingly. It’s a powerful combo of the sharemarket and financiers being in agreeance.
If 50% partial divestment (or alternatively, share issue) occurs, then the sp will be rerated to a less dizzying height. But the compensation for less altitude is a cash payout, likely in the $’billions. A massive cash payout of this scale implies a massive cash return.
I’ll post more when I have deeper insights into these interesting scenarios.
ARL Price at posting:
66.0¢ Sentiment: Buy Disclosure: Held
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