grinko - mate, just have a look at the fundamentals and the numbers we've been running lately and youll see the 'value' here.
i think brokers/intos are buying up slowly??
Ive run tonnes of EPS scenarios based on different pricing parameters and equity dilution parameters and have come to the conclusion that EVEN IF THERE IS 100% EQUITY DILUTION , the EPS is still SKY HIGH and would warrant a significant re-rating or UPSIDE in the future.
A few days ago I used price 100USD and proddy 3mill and 5mill and DOUBLED the equity, and came to the conclusion that the EPS was 80cps and 1.35 cents per share respectively (for 3 and 5 mill proddy)
So you tell me what price the share should be trading at!
We wont even need to double the equity , as CAPEX for small hematite operations is small. Furthermore, the company will most prob use a debt:equity strategy (the broker report assumed 70:30 debt to equity)
If I use this ratio, the EPS is MUCH MUCH higher
So 'ONCE IN PRODUCTION' this stocks got a $10 price tag .
Use any valuation methodology - NPV, Enterprise Value/Tonne, mkt cap/tonne, mkt cap comparisons to peers........and you see that under ALL methodologies, the stock is GROSSLY undervalued!
someone challenge me on this.
Ive even factored in lower long term prices and doubling of capital and the stock is still grossly undervalued on those terms.
Its a 'no-brainer' and has the best upside of all the semi speccie IO's cause its got a JORC, is near infrastructure, and mkt cap is small enough that theres is much lee-way for further dilution with EPS still remaining high!
I cant see how this company wont go up.
I have great confidence that they CAN be a producer . They can raise the money for capex for a train link to FMG EASILY! Why?? Coz theres not that many shares on offer and they can easily do a cap raising and dilute a little ........... with EPS still remaining very HIGH even if we use lower long term avg prices.
Using a long term price of 70USD , and DOUBLING THE CAPITAL and 3 mill proddy, i get 39.5 cents per share
Using same parameters and 5 mill proddy , I get 66 cents per share
thats using 70USD price, 48 AUD costs per tonne and DOUBLING share capital.
Obviously theres NO NEED to DOUBLE the CAPITAL, but it just goes to show you that in a VERY CONSERVATIVE scenario, the stock is still very undervalued compared to future EPS scenarios.
YML
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