Australia's largest stock trading and investment forum Australia's #1 stock forum

BAT

Click for more information

5.56%

1.9¢ battery minerals limited

BAT Upside Comparisons with SYR and BSM, page-23

First 23 Last

Share
Profile

Follow
Oxytorus

351 Posts.

64

01/03/19

09:38

Post #: 37615365
Share

Originally posted by Blythefan: ↑

Wombat,

$5.5M market cap per kiloton of output, which is nominally US$1.1M, is a 5.5x Earnings multiple on EBITDA and before processing costs. That is probably a bit long, especially as this is pre-dilution of BAT's equity for funding the capex. Last time i looked, Flanno couldn't convince banks to lend more than 60% of the capital, so BAT would have to get diluted roughly 40-50%. Which thereby makes it an 11x earnings pre-cost of production. After, it's ~15x.

So, I think you might be 30% out on the multiple of market cap per tonne of production. And after dilution of CAPEX, that is multiplied even more.

If you use $2.5M per tonne of production you wouldn't be too far off my guesstimate, which puts the BAT upside price at 9c fully diluted and in 2022, for Montepuez only.

The real upside is the ability of BAT to turn on a second module and double production. Once BAT is making cash flow, filling orders, and being paid, borrowing another $35-50M will be a doddle.

Expand

I'm confused. What's equity dilution got to do with market cap?

BAT Price at posting: 2.7¢ Sentiment: Buy Disclosure: Held
Upvote

0 Great analysis

Reply

Top Stories

History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

MIN

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

ACW

This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game

CVB

Monash tests show strong cardioprotective qualities for Algorae drug candidate

WC8

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

There are more pages in this discussion • 7 more messages in this thread...

First 23 Last

Add BAT (ASX) to my watchlist