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Red good homework there my friend
And will eventually drive the market valuation if a bid doesn't come before.
I quite understand that many on here will wonder what EBITDA, P/E, P/NAV etc and why they matter.
I apologise to anyone who may think that I am babying them, but the analysis earlier and what I am about to post show not only how ridiculously undervalued SOLG is, but also what will drive analyst/broker revisions and are the bread and butter for any major considering a bid.
So...to start with..
EBITDA is a measure of pre tax profit and it stands for Earnings Before Interest, Tax, Depreciation and Amortisation.
Investors and analysts alike tend to focus on three key measures:
P/E (Price to Earnings) this is calculated as to the Share Price divided by actual or forecast EBITDA
P/CF (Price to sustainable cashflow). The market capitalisation divided by the annual sustainable cashflow. This is important because its not lack of capital that busts companies, its lack of cash.
Finally, P/EV (or P/NAV) This is the MCap divided by the 'Enterprise Value' or Net Asset Value. This can be determined from the Balance Sheet. So SOLG's NAV at the last MD&A was $320.337m, so the P/NAV ratio was approximately 2.
The projected average annual cashflows from Cascabel are $743 million.
The current MCap of SOLG is $821 million.
So the P/CF ratio is only 1.1
That means that in an average year for Cascabel alone...it would only take 13 months to regenerate the entire market value of the company IN CASH.
So it doesn't take much to imagine how soon the company could [ay dividends. Certainly well before Year 5 of the project and possibly as early as Year 2 or 3...
From, say BHP's point of view, Cascabel would be enhancing their earnings by $1.2 billion a year and generating free cashflow for them of $743 million.
All sounds pretty amazing so far...
But it also demonstrates that worrying about only 3 million shares traded in one day is pretty academic.
If you are here as an investor, the numbers at the CURRENT copper price out of the PFS are pretty amazing.
One other example before I move on...
The CASH COST of the Capex is $2.7 billion...in an AVERAGE year Cascabel will be throwing off $743 million CASH which means the Capex could be repaid in just 37 MONTHS...
But it gets better...
Awww!
RK, in the absence of a bid we should all 'want a cash raise'. We'll be bust without one.
Angels on the head of a pin matey... ;-)
Sounds like you actually want a cash raise...
Lets leave it at that and part on good terms as always...
In fact at the current copper price the P/E comes down to 0.57...
Antalya currently 4.65...
BHP 17...yes 17...ANTO 16...
This makes it a no brainer for a major, IMO
Even a SOLG takeout price of 711 wouldn't dilute BHP's P/E ratio...
Can you see what a bid is inevitable...?
Well done again DBW...
As I mentioned before, that puts SOLG on a Prospective P/E ratio of 0.68...
And thats just for Cascabel alone...nothing in for Porvenir or whatever...
And thats based on an assumed copper price of $3.60/lb
Sooner or later value will out...
David7015, your 09.30 post is spot on. I've taken your advice and binned the moron. You can only take so much manure!
By the way, Darryl met Newcrest on his first day in post and BHP in his first week...
I di lunch...
But Alpala and Regionals including Porvenir are separately designated, so the 'ring fence on Alpala isn't a problem and...
The forecast expenditure on Regionals is greater than the amount raised from Valuestone so that isn't a problem either....
It still leaves $14 working capital million for admin and licences...
I think they'll hold the issue up until either, the SP is up and moving up or, if they have a significant interest in North America and Europe where the focus is right now...
But of course a bid makes all this academic...
As the Colonel has implied, the extra $50m from Franco (yes I know it elapsed but they'd willingly give it) or a juicy similar offering from Boliden might just be enough to snap BHP's patience...might not need much...
Thats fine addickt....news before then...
RIO overdue...could be the first or se and RNS...
Sean, it takes less time to filter the idiot than respond. It also stops repetitive & vitriolic responses which clog up this board.
30p + close today, then UPWARDS & ONWARDS from next Tuesday !!! It's coming ; o ))
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30p + close? Wishful thinking!
Western Australia? No wonder you're so lonely. A cruel mix of remote geography and your awful personality.
RK, I did see your analysis and agree with you...a fund raise is likely by the end of June, which in my book is soon.
Bid incoming then :) :) :)
Hi addickt. Please give your reasoned logic as to why a placing is due soon.
And can you define soon?
You probably saw my financial analysis, prompted by my contact who was not implying an early equity issue.
Cheers
30p + close today, then UPWARDS & ONWARDS from next Tuesday !!! It's coming ; o ))
Incidentally, the conversation with CGP would have been fascinating. The company promised action to produce shareholder value, which in a way they have - via the PFS. However, this hasn't led to a sustained increase in the sp and I wonder what CGP's current thinking is. Now that DC has stated openly that's he's receptive to bids, I wonder if that was sufficient to keep CGP happy?
We are at least down at a level where a placing - at 30p.or 32p - might be a nice surprise for a new investor.
Or who knows,the placing could be with a new institutional investor.
Just wish they'd get it over with. With Nick it was placings morning noon and night.
RK, exactly. Previous roadshows have seemingly produced limited interest, but it's different now. Having said that, I can't see anyone buying in the market when they know a placing is due soon.
Yeah but we need loads more...
If its 11.30am where you are it can't be 14.00 hours anywhere you plank, that's not how timezones work. Get off here and stop using it as a lonely hearts column.
"some of our largest investors are in North America"...indeed - CGP and BR.