I remain bullish on Elk and am a fan of what Brad Lingo has done to position Elk for scale and profitability. Good to hear that Brad believes Grieve production to be just a few days away from now.
That said, the OGIS presentation posted earlier today appears to be a sloppy and careless rehash. One glaring example: Slide 19 - last bullet on the page - states that Grieve production "is expected late Q1 2018".
More interesting is Slide #4 which includes the following assertions:
- Market cap of US$ 165 million
- PV of US$ 410 million . . . suggesting a roughly 2.5x uplift in current share-price
- Long term debt of US$ 175 million
- Debt to EBITDA ratio of 3.0
That last bullet appears to be - again carelessly - over-optimistic, given forecast 2018 EBITDA of US$50 million. Because the debt is presumably both real and now/today. While the forecast EBITDA depends on clean execution over another 2-plus months of this fiscal year.
Possibly I just missed it - or perhaps it wasn't included in the presention - but can anyone comment on what Elk's forecast 2018 debt-servicing costs are on the $175 million of debt contrasted with refinanced debt-servicing costs, once Grieve production is proven rather than promised ?
I'm mindful that EBITDA means Earnings before INTEREST, etc. So I am trying to understand what the bottom-line for net profit looks like for both 2018 and 2019 ?
I continue to believe that Elk's share price will cross 20 cents per share by the time full-year results are reported for FY2018. But probably my earlier call of "above 25 cents by mid-August" was over-optimistic. I have already guessed wrongly - badly - by predicting that Elk's share-price would cross 20 cents per share by mid-February.
Sign me still bullish but (somewhat) chastened. Not a seller below 25 cents based on current prospects though.
ELK Price at posting:
8.9¢ Sentiment: Buy Disclosure: Held
