True it does have to be paid back, but not in one accounting period.
If you look at your spread sheet you have the term debt being paid in the same year (ie term /long term debt cleared by short term cashflow) which you then use to calculate your present & future values. This will distort you share price.
Are you are wanting to do a cashflow analysis?
If this is the case then interest costs/ admin/ debt reduction/ taxes / depreciation need to be factored in & the assumption list just got longer.
That long term liability created for CAPEX may be amortised over say a 7 or 10 year period.
If it were a current liability (short term debt), I would agree with your reasoning to include it in the cashflow calculation.
What if say 30% was funded by a share issue & never nedded to be repaid (will dilute holdings however) & only 70% of that debt loading needs to be repaid &/or interest met?
Or what if a corporate bond? May be rolled over into another series as the period expires or coupon is due for payment (ie another bond raising or retired if funds available.)
We will have a better idea when the funding is announced (again GUS come on- hurry up) & on what terms. Will then make it easier to try to ascertain cashflow then etc.
At the moment I think it is a matter of do you think this project will proceed & if so is it currently undervalued or not?
You then place your bet (or not).
Short term, I have no idea where we are headed as other influences are pushing the price around. The one consolation is this mark down has been on low volume for a protracted period & the top 20 are increasing their holdings.
As stated previously, two or three factors need to be resolved to significantly (that should be in bold) derisk this share, coupled with almost certain rise in U price at some point due to supply constaints, puts PEN & other near U producers in a enviable position.
Will this happen tomorrow, unlikely. Can we still suffer more pain (not impossible).
It's good to see other reasonings & calc put up for scrutinisation.
It takes (me anyway) out of my comfort level & open to suggestions/ridicule if I am wrong. And if wrong hopefully save me money...but I've placed my bets, maybe a bit too soon :(
M
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Open | High | Low | Value | Volume |
10.0¢ | 10.5¢ | 10.0¢ | $299.6K | 2.962M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
16 | 1131679 | 10.0¢ |
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Price($) | Vol. | No. |
---|---|---|
10.5¢ | 7498529 | 47 |
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No. | Vol. | Price($) |
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16 | 1131679 | 0.100 |
12 | 783130 | 0.099 |
7 | 505057 | 0.098 |
6 | 778140 | 0.097 |
9 | 3176979 | 0.096 |
Price($) | Vol. | No. |
---|---|---|
0.105 | 7498529 | 47 |
0.110 | 3559215 | 40 |
0.115 | 3694918 | 25 |
0.120 | 6331738 | 45 |
0.125 | 1607033 | 17 |
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