Ann: Resource increase at Montepuez Graphite Project, page-18

DYOR. The following is based on my own estimates of share prices derived from a peer analysis with Syrah. Do not interpret as a formal valuation.
​

Laying out two scenarios:

1. Base case - similar level of dilution to the dilution that applied for the RCF debt / equity deal. This results in a share issue in 2023 of 1.9B shares.
2. Excessive dilution (worst case) - AUD $50M raised at $0.03 / share with 1 option for every 2 shares. I just picked AUD $50M as the nominal amount needed and I think it is adequate for the pessimistic view. This results in a share issue in 2023 of 3.9B shares.

For this analysis I've assumed no change in the production ramp-up plan for Montepuez and Balama. This can be expected to change negatively (push to the right anywhere up to 12 months) due to the delays in financing and probably positively due to grade increases at Balama and Montepuez. This also enables the analysis to show the affect of the July 2023 options being exercised.

We wait for the Balama DFS to be completed sometime in August. We also wait for assays and a further resource update for Montepuez.


Assumptions/method:

• SYR MCAP and annual concentrate production figures (initial ramp up to 160kt pa) have been used to estimate MCAP-apportioned value of 1 kt of concentrate output as AUD $5.4M. That's just by taking current SYR MCAP @ $860M and dividing by 160.
• The AUD $5.4M calculated above is then applied to production ramp-up values for BAT's Montepuez and Balama Projects. ( shown as green bars on the price target charts )
• I used 52-week highs for SYR and BSM to calculate an adjustment factor (+49%) to arrive at top-end price targets ( shown as grey bars on the charts ).

Note - My preference is to average across multiple peers and I looked at considering BSM in the average, however I felt this would push the value too high and I wanted to get a view of the bottom end of share price ranges.

In the charts I have tried show bottom-end share price estimates derived from the analysis and also an adjustment to account for positive sentiment and top-end share prices to give a range.

The important qualification here is that this analysis is dependent upon the company ramp-up plan. We have not been given an update since funding collapsed ( which we can expect to push to the right ).

I leave it to you to infer value of the BATO options in the two scenarios.