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only down because of the funding
Obviously time will tell if the current buy price turns out to be cheap or not, if the finance is sorted soon as expected and the sp moves back to where it was a few months ago to over 40p then this is cheap but of course if it goes the other way not so much!
How much do you know about business?
Have you guys at least read prospectus?
Wasn't it about 20 years of life-time (NPV cashflow multiples below 1.5 m-cap) and given current mess-ups with:
- failed production technology (not giving useful/expected quality output they can sell),
- wrong/dysfunctional equipment they've spent millions on (had to be replaced)
- previous additional equity raise (well above initial plan)
- requirement for onboarding additional debt (under very harsh covid-related conditions - it's almost impossible to get money on favorable terms without predatory conditions these days for start-up projects) even before starting production at full scale (just to get there)
- debt being secured at significant discount vs assets (if it goes south - there's nothing left of equity) and assets are sitting in a middle of desert (not tradable at market value)
- poor track history on proper promised delivery by BoD as per above.
- high probability on either failure or additional equity raise (=significant dilution).
- low NPV discount rate (8%) applied on cash-flow valuation (accounting-wise might be fine but it's not risk-free project) when it was sold to investors (a bit misleading marketing if people don't understand much about how these things are calculated)
Considering all of this (and failure statistics for startups and AIM market in general) - NPV (at right rate taking account risks) can be put somewhere close to 100m+ AUD if they do manage to pull this off, there are other very likely outcomes: no-options take-over for pennies (like with Sirius), further dilution, administration/insolvency/liquidation - average weighted outcome isn't that bright tbh.
I get it what many here have bought-in (presumably "cheap") and trying to ramp-up but be at least realistic in line with actual business plans. It can play-out well and multibag - but there are intrinsic limits based on business fundamentals (and yeah - it indeed can go well above it due to frenzy effect and other like with gamestop' short squeeze).
I was thinking about taking position here but without financing sorted (under current harsh lending market environment and fragility of business SO4 is involved in) - it's wipe-out, doesn't fit my risk profile, pure gamble unless you do know some insights on their financial agreements (and trading on this info would've been subject of MAR).
1.5bill MC within 5 years here sounds great but I agree that there would likely be a buy out well before then, let’s just hope it turns into a huge bidding war!
I think the big boy miners would be into buy them long before they get to 8 lakes.
Of course Newboy I hope your right :-)
I think it's a good long term hold, with 3 lakes you can treble that and more with economies of scale.. £1.5 billion mc in 5 years, wouldn't that be nice!
Then say £100 million Divi every year, that's half your current holding back every year!
Maybe getting ahead of myself now!
Tony on V ox markets again today - i won't post the link as it never works.
Upbeat as usual. He stated the annual profit (not EBITDA) from the first lake would be AUS$80m.
That's £45m so using a conservative PE of 10 that's a valuation of £450m - double the current price.
Obviously this excludes the other 8 lakes.
Tony on VOX markets today..
https://www.**********.co.uk/series/daily-podcast
I think it's the final approvals that will finally shift the SP...
yes, Tony talking about imminent revenues and profits which is great.
I think sentiment has been damaged here as shares are meant to be forward looking. Maybe the revenues will have to actually occur before the share re-rates. With an EBITDA of over $60m this looks quite cheap imho
Another upbeat RNS and good news on potash production.
Great way to start the Monday morning with good news from down under.