Been waiting for this ann.- some numbers from which to hang a...

Been waiting for this ann.- some numbers from which to hang a decision

Things very positive for this miner of industrial minerals

Simple product with possibilities beyond just bagging and shipping to add value with R&D. Check out Phoslock (ASX:PHK) which is using bentonite as a medium with lanthanum (check out another ASX co. Lynas -another heavy use of REE.)
If PEV can find higher value to use then it will add to the valuation attempt below.

The weaknesses might be
a.) the board, with one exception,looks light on building business in the mining services/industrial side?
b.) from research bentonite is a common enough clay..getting those export sales orders is an unknown as to how badly these customers want it or whether PEV will have to discount price
c.)Transport is a biggie in the overall cost structure
d.)Still have a company to build - teh detail is in the execution

Anyway my rough calcs support 3 to 5 times the current 8c.

I have been conservative - ignored gate sales, ignored the other projects, added $1m for loans, chucked in a pinch of depreciation and a spoonful of sales/production growth 20% and attendant costs growth 10%.

VALUATION DISCOUNT RATE SHARE PRICE
$78M 15% 25 cents
$97M 12.5% 32 cents
$124M 10% 41 cents

CURRENT SP 9cents. Yes folks roll up roll up


% Category Total Split price/t
75% sundried 100000 75000 $ 120 $ 9,000,000
25% processed 100000 25000 $ 180 $ 4,500,000

REVENUES $ 13,500,000

100000/t direct $ 8.25 $ 825,000
100000/t transport $ 65.00 $ 6,500,000
100000/t other, say $ 2.00 $ 200,000
COSTS $ 7,525,000

EBIT $5,975,000
deprec, say -$ 200,000
interest 10% -$ 100,000

NPBT $5,675,000

No tax 1st 2 years because of accum losses so NPAT $5.67M years 1, 2 then $4.8M


Comments -?