At 2.2cents per share the NAV of the company was about 50mlAUD....

At 2.2cents per share the NAV of the company was about 50mlAUD. (register = 2,331,000,000 shares)

To become a "real mine" FSE say they need another 50mlAUD of CAPEX to buy the digging machines etc. etc.

Notionally, a cornerstone investor that brings in the extra 50mlAUD cash would want shares in the new entity. On this deal if I was a cornerstone investor I would want 2,331,000,000 "new" shares for my cash. This would bring the share register up to 4,662,000,000 shares and the NAV up to 100mlAUD. The SP would still be 2.2cents/share and no coal would yet have been dug/sold.

Recently, FSE valued itself at 234mlAUD using a 25% IRR and a rate of 10% net present value. So the head room on the SP up to "fair value" was 234mlAUD/100mlAUD X 2.2cents = approximately 5cents/share.

Any SP above 5cents could be thought of as "exuberant enthusiasm of gullible speculators" and would signal "sell" to me to buy back later.

Of course, this model only works while the share price was at 2.2cents.

AS the SP today is 3.1 cents our cornerstone investor is going to get less than 2,331,000,000 shares for his 50mlAUD. so the share register will not get as big as 4,662,000,000 shares so the "fair value" 234mlAUD/share register must go UP!!

Make sense to you??