TLM was up 33% Friday on the news that MIN has paid its 1st royalty to TLM for production at MIN's Wonmunna IO mine. The only thing that may hold this back, that i can see, is a few legal issues between MIN and FMG, but if that was the case why would work start production ... and why pay their 1st royalty??? They have to be pretty confident
1% Gross smelter royalty on 5mt pa IO (current 2021 run rate by June 30) with the potential for production to expand to 10mt pa... Using 58%FE of $100per tonne thats gotta be worth $5mil pa minimum. (current spot price of 58% fe is $150 puts the payment at $8m pa)
Discounting those cash flows and being very conservative the royalty should be worth between 30-50mil NPV8 to TLM TLM also has $10mil cash on hand
Just these cash assets alone should put TLM at 50m MC. (its currently trading at 26m MC)
Is this totally mispriced or Am i missing something here?
