Houston, we have a problem - Part 2.In my post yesterday I...

Houston, we have a problem - Part 2.

In my post yesterday I showed if steel industry EV / EBITDA multiples are applied to Kogi's scoping study forecast of EBITDA for the Agbaja project (which I adjusted because the Company's estimate of G&A was ludicrously low), Kogi's EV (ie market cap if no debt or cash at bank) would be less than half the project's cost.

There was little reaction to my conclusions other than Kev's comment that "China needs us as much as if not more than we need them." I am not sure what that means WRT to the Agbaja project, if anything.

There has been some suggestion the Agbaja scoping study will lead to partners or strategic investors coming on board. Someone will have to explain to me why - if the scoping study provides evidence that $2 of investment will be rewarded with $1 of market cap (or less) - anyone in their right mind would want to participate in the project.

Following that line of thinking, I guess I just don't understand how the Agbaja project has gotten this far. Surely management - or the Company's advisers - are capable of doing the simple numbers which show potential market cap of A$340 to 385m versus project capex of A$725m?

The Company claims to have been progressing the feasibility study for years, so the numbers cannot be new. Or maybe they are?