Valuations

It's been a while since potential valuations have been discussed. A thread discussing potential valuation based on future earnings would be worthwhile again now that completion of funding is getting closer and phase 2 (final stage) of construction is likely to kick off on a loan approval and now that the main slabs are laid. I will share my views and it would be good to get constructive feedback, preferably without the spamming of this thread with the repetitive downramping that everyone has already heard enough times. If those two downrampers want to contribute, try and keep it on topic or create your own thread on risks. Leave this thread for the topic of valuation.

One way to value the stock is using the DFS NPV valuation and adjusting that valuation using the sensitivity tables for variables like TSP price and also adjusting for the SWF investment for 22%. I'll use that method for this post and assume a 65c AUD.

The after tax, base case NPV of Minbos's previous 85% share of the project was US$203mill. That was based on its 85% ownership and a TSP price of $422/t. After the SWF investment, project ownership dropped by 22% so MNB's US$203mill after tax base case NPV drops to US$158.3mill or A$243.6mill.
However that DFS valuation was prior to changes that reduced upfront capex by US$10mill and stage 2 capex by US$25mill for total capex savings of US$35mill or A$54mill. NPV is calculated from future cash flow minus capex so a $54mill saving in capex adds $54mill to the project NPV. It's not quite that simple because future cash flow is discounted for time and stage 2 expansion was in year 7 in the DFS. Bringing it forward would increase NPV by bringing cash flows forward which reduces the discount on that cash flow.There might also be a discount to the stage 2 capex saving but that would be more than offset by the reduced discount on brought forward cash flow from the earlier expansion. So NPV is likely to increase by at least, the savings on capex. Tax is a consideration for after tax NPV but tax is very low so I have left it out for simplicity. TSP price and opex variations would have far more impact than the minimal project tax.
After tax NPV attributable to MNB would be A$243.6m plus MNB's 66.3% share of capex savings (A$35.8m) , bringing MNB's share of after tax, base case NPV to A$280mill. As mentioned above, that ignores any benefit to NPV of bringing higher, later year cash flows forward which reduces the discounting on those cash flows.

That A$280mill after tax NPV is with a base case TSP price of $422/t but the price is currently $641.
The sensitivity table 18-3 in the DFS shows that a 20% increase in TSP price, increases base case after tax NPV from US$203.16 to $260.87 which is an increase of 28.4%.
The TSP price is currently $641.3/t (World Bank Pink sheet for July 2025). That is 52% above the $422/t base case TSP price that I used to estimate the after tax NPV of A$280mill. If I only assume a TSP increase of 20%, the after tax NPV would increase by 28.4% to A$360mill.
That would be using a TSP price of $506 compared to the current price of $641 so there is plenty of room in this valuation for a big pull back in the TSP price.
A$360mill after tax NPV compares to the current market cap of A$61mill. I'm expecting a much higher sp so I'll allow for all options to be exercised, including the 17c options. That would bring the fully diluted mc up to $72mill. That still allows for a potential 5 fold upside to the fully diluted mc to reach the estimated after tax NPV at a TSP price of 506/t which is well below the latest price of $641. Worth considering too that if all options are exercised as I assumed, that would raise $14.7mill in cash for the company.
A 5 fold increase in the fully diluted mc would be equivalent to a five fold increase in sp from 6.3c to 31.5c. If not all options are exercised, the upside is larger. Likewise, if you want to allow for another cr, the upside would be less. Any near term potential cr dilution might be fully or partially offset by less than 100% of all outstanding options being exercised.

These targets are based only on MNB's share of the phosphate project, do not reflect the increase to NPV of bringing higher sales volumes forward from earlier stage 2 expansion, do not allow for likely increased sales volumes potential from blending and selling the newly announced NPK fertiliser which would meet the needs of many more farms than a phosphate only fertiliser like TSP or MNB's phosphate fertiliser. It also doesn't allow for increased profits from a value added product like the NPK blend. So while there are also risks, there is clearly potential for more upside to what I estimated above, especially at spot TSP price which would add at least another 30% to the estimates above which were based on a 20% increase compared to the current 55% higher TSP price. Using spot TSP price, my 31.5c target could jump to over 41c.
This also excludes any valuation for the green ammonia project.