Khemmiset Project - Figures27 Aug 2020 08:25
I have taken some more time to have a look at the figures of this project taken from the feasibility study. They are quite staggering and certainly a world class mining project. With $1.4bn post tax NPV there is huge value to be had from this by EML. This has been compared to Highfield Resources 'Muga' Project in Spain but remembering that the feasibility study for Khemmiset is based upon 43% of the mineable resource.
As a result of this comparison and to other potash mining stocks mainly listed on the ASX, EML have a current valuation of 3% of the NPV whilst the ASX average is 33%, that represents a 10 x upside from this level just to be comparable with the sector average at a similar project stage. Highfield Resources have a current value of $136m AUD or £74m which could be used for an initial correction target representing 10p+ for EML. It is believed that Highfield are also significantly undervalued.
So my interpretation of this is that at £33m MCap and the current project status EML are perhaps undervalued by a significant amount. As the project de-risks further value could be added to the MCap of EML until it can consider annual revenue as a means to valuation rather than NPV. Looking for some rather big upside from here to represent fair value.
Good luck everyone, this really does have the potential to be quite a phenomenal opportunity if it can gain some traction in the market.