I do love these daydreamers. The thread title is '75c fully funded' which is all based on some HC punter, thoughts. It is nowhere near as bad as @oznt figure of $20 per share.
WKT has completed a few research reports in the lead-up to the Nordic Bond launch, where they suggested WKT should have a value of 64c when it was in production.
We have updated our valuation for Walkabout, with a risked figure of A$238 million, or A$0.64/share (Tables 8 to 10) - this is slightly higher than our 2017 valuation of A$0.62/ share - a key difference in the per share valuation offsetting the higher risk multiple in the current valuation is the modelled increased share structure.
This includes a post-tax, geared DCF valuation for Lindi using a discount rate of 10%, and estimated/nominal figures for the other assets - our valuation approach for the other assets is shown in Table 10, and largely uses either the acquisition cost or the cost for the first stage earn-in; our nominal A$5 million value for Takotanwe remains the same as for our 2017 note.
Our risking of Lindi takes a technical approach, based on the weighted average of Proven and Probable Reserves in the production profile - as a rule of thumb Proven Reserves are valued at 100% of NPV, and Probable Reserves at between 20% and 50% - given the close to 50:50 split between the two, this results in a technical risk factor of between 60% and 75%, with a mid-point of 67.5%.
However the market will commonly discount this further, with projects at Lindi’s stage of approval and financing commonly trading at ~+30% of NPV (and which discount rate that is used is another factor - here we have used 10%, to match that used by the Company - using an 8% DR increases the unrisked project valuation to A$391 million, or 18%).
The effect of changing the risk factor is presented in Table 9, with this highlighting that, even if the value of Lindi is highly risked by the market, the per share valuation is still a multiple of the current share price.
The key drivers for moving the share price will be finalisation of offtake agreements and project funding.
(20min delay)