Argex Titanium Inc. ARGEF

RE:Don't worry

[MoneyManager101]

No Investor that has done there research on RGX should take this thread to seriously with there investment thesis. Investment Thesis Argex is set to be the lowest cost producer of pigment grade TiO2, and is poised to capture market share, and generate shareholder value. We consider the TiO2 pigment industry structure and have determined the current tight supply condition to continue, and with industry projected demand growth, and strong prices to persist. Current producers have only two high cost production alternatives to make TiO2, namely the Sulphate process or the Chloride process. Argex is licensed to use The Canadian Titanium Limited (CTL) process – a hydrometallurgical process based on acid leaching and solvent extraction of low grade titanium bearing ores.This is not feasible by the two other existing methods. In addition, the CTL process has lower raw material and energy costs and produces significantly less waste. Presently, Argex is seeking to finance its first commercial scale plant in Valleyfield, Quebec. The company is undergoing the technical stage of the due diligence process and has completed a positive feasibility study. Argex, we argue, will lead a disruptive change in the TiO2 pigment space, pending the outcome of the project financing.Supporting our view is the recent collaboration and supply purchase agreement signed with PPG Industries Inc. (“PPG”) to develop coating technology and finished product for coating applications. In return, Argex will supply PPG with 50% of its production capacity. The remainder is contracted through US Helm Corp. (“Helm”). Our model is based on a single commercial plant with target operating capacity of 50,000 tonnes per year.The model generates a share value of $2.10 with a TiO2 product price of US$3,200/tonne and a conservative discount rate of 12%. Supporting our valuation area higher current TiO2 product price of US$3,400/tonne, a gross margin of 59%, and a relative valuation method using 1-year forward P/Eand EV/EBITDA multiples.