You cannot combine the both together to form the valuation as 1 is close to fair valuation (AMAL) where the other is under value (Alliance). Also Tawana has many more projects.
Also market cap is just a rough guide. Look at below calculation
Production
- Spodumene Concentrate = 120,000 to 160,000 tonnes per annum (average 140,000)
- Tantalum Pentoxide = 300,000 pounds per annum
Before processing, these ores are worth
- Spodumene Concentrate = US$900 per ton
- Tantalum Pentoxide = US$60 per pound
Total worth per annum (before accounting for operating costs)
- Spodumene Concentrate = US$900 per ton x 140,000 = US$126,000,000
- Tantalum Pentoxide = US$60 per pound x 300,000 = US$18,000,000
Total worth per annum (after accounting for operating costs)
- Spodumene Concentrate = (US$900 &ndash US$250 per ton) x 140,000 = US$91,000,000
- Tantalum Pentoxide = (US$60 &ndash US$30 per pound) x 300,000 = US$9,000,000
The infrastructure is mostly in place or funded by Tawana Resources, so Alliance shouldn&rsquo t incur too much of a cost here.
Total operating profit per year about US$100,000,000 or S$140,000,000
Alliance Mineral 50% share in Joint Venture = $70,000,000
Additional expenses for Alliance Mineral assuming $5,000,000 (tax, administrative etc)
Net Profit = $65,000,000
Assuming a 8x P/E ratio, same as Galaxy Resources = Market cap to be about $520,000,000
Target Price = $520,000,000 / 480,000,000 shares = $1.08 per share.
If profit is 70m or lets just say 40m. What is the PE ?
TAW 100M market cap / 40M profit ? = P/E of 2.5?
Simple calculation P/E of 5 will bring your market cap of 200m which resulted a share price of more than 45c
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