Toll mill - Benefit to JM?31 Oct 2021 14:04
Quiet weekend over here for me, so thought I'd crunch some numbers (very basic numbers at the best!).
I am assuming a market cap of £200m once in production (given the current market caps of Mako and Calibre who are probably best to compare given they are both producing within country). The market cap of £200m is open to debate but I'm going to use this number for the time being.
We currently have 147m shares in issue and with adding outstanding warrants, stock options and recent warrants from Friday gives us circa 178m shares if all were taken up (which would give us some cash). Without knowing Jim's warrants, he currently has 28m shares, owning 19% of the company.
For the capex, we may need £30m for the equity.
If we toll the Mestiza ore to Calibre, depending on numbers, that could cover the £30m we need. If so, with 178m shares that would give a share price of £1.12. As no further dilution, Jim's 28m shares would net him £31.5m.
If we don't toll mill at raise £30m at 40p (subject to debate), we would add 75m shares which would give us 247m shares which at £200m market cap would equate to 80p. If Jim subscribes to 25% of this raise, we would add 20m shares for £7.5m which would give him 48m shares which would equate to £38.4m (he wouldn't be that much better off from the above option).
If we struck a toll but if the numbers weren't enough to cover the equity raise of £30m, I would hope our share prices goes up. Lets say we raise £30m at 60p, that would add 50m shares which would give us 222m shares. If Jim subscribes to 25% of this raise, we would add 12.5m shares for £7.5m which would give him 40.5m shares which would equate to £36.5m (he would be worse off from the top option).
Just food for thought. Let's not forget about Mark's shares in the company. He wouldn't be able to participate/raise enough capital to assist in the £30m raise to maintain his 2.9% in the company. Remember, he gets a bonus at certain share price over £1 (is this only if we are sold? I can't remember). Also, I remember Mark mentioning (some time ago) that he has "close" friends who between them roughly account for several % of the company.
Appreciate constructive feedback and for these numbers to be scrutinised.
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