RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:four asked to re bid
Hmmm. If there is an area that the annual reports were weak or left us in the dark it would be the tax credits. Significant tax credits were noted for the first time in June 2018 annual report.
Consider the early investments at 20c.
The tax credits represent ...
1. a significant portion of the underlying value, or
2. an important margin of safety, or
3. both
===
June 2016
There were 45M shares that were underwater but had significant tax credits.
0.8M
-3.4M
= -2.6M
tax credits = 40%*18M=7M
(-2.6M+7.0M)/45M shares = 9.8c/sh
===
Insufficient cash was raised for bulk sampling.
The tax credits represented half the value.
June 2017
25.0M
- 16.5M
= 8.5M
tax credits = 40% * 20M = 8M
(8.5M+8.0M)/123M shares = 13.4c/sh
===
June 2018
If one includes the tax credits there was little change in the value post bulk sampling.
33.0M
- 19.9M
= 13.1M
tax credits = 40% * $24M = $10M
(13.1M+10.0M)/175M shares = 13.2c/sh
===
Notes:
1. use 80% of the deficit as an estimate of the tax credits.
2. assume that the tax-credits could be sold at 50% of their value.
50% * 80% = 40%
eg 40% * $24M = $10M June 2018