Does anyone want to have a go at justifying a valuation of $2.2b for ILU? They are currently making in the order of $60-70m per annum free cash flow (based on H1 2015, including MAC royalty). The MAC royalty is paying around $60m per annum before tax, so is it appropriate to say without the MAC royalty their mineral sands are only just breaking even?
In that case they must be valued on the value of the MAC royalty (anyone hazard a guess, mine is around $700m but it will vary hugely on the future 15yr iron ore price) plus mining assets (plant, tenure etc.) and inventories. Debt is low(ish) and mostly paid off.
The floors open to anyone who wants to have a guess at a valuation...
ILU Price at posting:
$5.46 Sentiment: Hold Disclosure: Not Held
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