@notlistening14,
Finally got down to reviewing the Project fundamentals:
From the Timor Smelter Study:
Manganese Ore sourced from Indonesia 320,000 tpa
Total Smelter Feed 290,000 tpa
FeMn Alloy produced 155,000 tpa
FeMn Alloy sale price* US$ 1,100 /t
Cost per Tonne Alloy (at full production) US$ 793 /t
Operating Margin (at full production) US$ 307 /t
Whilst the price of Manganese is now 1800/tonne (63% increase), it only makes sense to apply this to the margin since unprocessed Manganese required, and the cost paid to local suppliers would increase in line with higher prices.
$300/t margin x 1.63 = 500/t
20,000tpa per smelter = US$10M per smelter
(From this routine capex would need to be deducted but lets ignore for now).
So 8 smelters = US$80M
Applying PE of 5 = US$400M = AUD $520M.
With 1.8bn shares on issue
Share price $0.30!
As I started writing this I wasn't sure which way I'd go - but looks like your calcs are correct (not that I doubted you, but prefer to check myself).
So if management can somehow get this project kick started and to full production there appears to be significant upside.
The biggest risk here is still that this value can only unlocked via an investor who needs to put their capital at risk. They will demand a majority of the returns as they will be aware that without them no one can realise any value.
I didn't realise just how viable this Project is at the current Manganese prices, management really should have provided an updated cash flow/ feasibility forecast.
This may explain why Pak wanted a greater share and begs the question as to what terms were proposed in his counter offer.
If he wanted to invest US$50M for 50%, then GMC would still retain 50% of 500 and have funding certainty.
Wouldn't be complaining with 250/1.8bn or a 15c share price if the deal with Pak was locked away.
Whilst it appears that we have a viable project (based on the Timor Smelter Study assumptions), I'm not convinced we have the right management team to lead us forward given that each day delay is costing us - Manganese prices won't last at this level forever
