Share price - General Discussion, page-29

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TrayonRanger

9,332 Posts.

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19/02/20

14:19

Post #: 43022558
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Originally posted by ChinaSyndrome: ↑

I have been pondering the vagaries of how Share Price is determined by Investors for quite a while. One of our big problems is that EV is an emerging Technology and the Markets do not seem to be able to recognize just how big EV's and associated technologies is going to be in the future decade or so.

It has occurred to me that we need look no further than the Industries we are set to replace (in part) ie the Oil Industry. The public has a finite amount of money to spend on Transport, so what they spend today will probably be close to what they are willing to spend tomorrow. Sixty percent of Oil produced goes directly to Road and Agricultural use, given that 2018 Word production was 30 Billion Barrels, we should expect EV to be able to replace at least 10BbbL.pa ~ US$600B ! (note, that is just the fuel cost, it does not include purchasing the car/truck)

The Market Cap of the top seven major producers is well over US$2.5 Trillion !

So how big a slice of that Capital will transfer to Industries associated with EV ?, even if it is only 50% that still means there are going to be some very big Companies developed in supplying raw materials to the Battery and EV motor, Wind turbine Industries.

For example: Taking a small Ozzie Oil explorer Oil Search, they have in-ground Reserves of 300MMBBL which at current prices is worth US$18B. Once that in-situ value has been discounted for production costs, recovery, transport etc it allows the Company to achieve a M/Cap of US$6B

Now, if we apply a similar logic to Rare Earths; We find that a reasonably optimistic in-situ Resource for Longonjo is very roughly 1 million tonnes of NdPrO, which at current prices is worth US$50 Billion. Assuming similar costings/recoveries etc to the oil industry (swings and roundabouts) it would not be that far out of order to speculate that with two and a half times the Resource value of Oil Search in the ground, we might expect our M/Cap to end up at around US$15B, if we have 200,000,000 shares issued (I am assuming we will need to raise some OPEX till we get into production) it would give PM8 a SP of around US$75 or A$100.00

But I admit, I have made an awful lot of assumptions, and the result seems to be obscene, SO let's be REALLY pessimistic and cut it by 90%

$10 .......

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"...and the result seems to be obscene, SO let's be REALLY pessimistic..."

I'd rather not if you don't mind.

PM8 Price at posting: 24.0¢ Sentiment: None Disclosure: Held
2 Upvote

0 Great analysis

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