RE:RE:Average Target PricesI can't say for all of the analysts; however, the Sphene report from back in May relies mostly on a discounted cash flow (DCF) model.
I expect most analysts are at this point using at least some percentage of a DCF for Sangdong and soley DCF to model Los Santos and Panasqueira.
For Sphene, to get to $1.69, they are using only $45.8 million CDN in sales from Sangdong, of total sales $105.8 million CDN, and a free cash flow of $23.3 million, discounted at 8% annually. They have sales growing by about 2% per year.
Almonty's May presentation shows sales of $87 million CDN ($64M USD) from Sangdong, and after tax cash flow of $32.8 million CDN ($24M USD) from Phase I so the initial plan, without ramp up.
With Sphene's numbers on the DCF model being so low, they are certainly only using the phase I production, I expect the other analysts are also assuming phase I production in their DCF's and possibly adding a bit of value for the potential of phase II.
I completely agree that $1.70 is nowhere close to an adequate value on DCF terms if you assume Almonty is going to start Phase II by 2027 or even 2028, as I do.
My valuation ends up higher than $1.70 even if I:
- discount the project at 10%, too high in my opinion given it's a previously producing project, has an offtake agreement, and is less than one year from production;
- only include 15 years of discounted cash flows (depsite 90 years of forecast production);
- ignore Almonty's other mines; and,
- ignore the potential for the Tungsten Oxide plant.
Good luck all, hopefully some construction news next week.
5ilverlining808 wrote: I wonder if these projections are for the initial 160k tpy plan after plant starts or the 240k tpy ramp up goal ??
$1.70 per share at best is not nearly enough for this at full production imo.
What should it be in your thoughts ??
Open question....