Another Possible Valuation There are a million and one ways to structure and price any deal.
Ultimately, valuation in this case is as simple as taking the buyers' required IRR, cost of capital and back-calculating (using hundreds of assumptions, best, probable and worst case scenarios) the price using discounted cash flow (NPV) they'd be willing to pay to achieve their minimum IRR. That's simple, but the assumptions are very complicated. So, I'll use some back of napkin stuff below and round numbers, and conservative. Don't kid yourself, foreign exchange rates are significant.
Anglo's sale of its fertilizer operations: $1 billion expected for 1000 ton/an plant at EBITDA of $100 million. Therefore implies they are expecting an enterprise value of 10 X EBITDA.
Let's say at full production, MBAC achieves its 500 ton/an at $50 million EBITDA in 2 years. (from Kiss' post rounded down by $20 million)
Let's use a multiplier discounted (many reasons) from what Anglo wants, say 7 (use 5,6,8 also). Enterprise Value would then be $350 million and say Debt at $250 million. Therefore equity is $100 million. Important, then add the value above book value (premium) of Santana and the other property, and the premium for the other 75 percent of unexplored acreage at Itafos. Now divide that by shares outstanding plus some for the warrants.
That's a pretty big number! Now, don't forget to convert the equity value from US dollars (also their financial statements are in US dollars) to Canadian dollars (the currency of the stock price). So multiply $x million (equity value) by 1.35, and then divide by shares outstanding.
Alpha may be the holding company transacting with MBAC. I can's see how they have the expertise and funds needed. I theorize that there is a large, fertilizer company, with large US dollar denominated cash on hand (or access to) backing Alpha's transaction. For discreteness.
Of course there are many, many holes in the above. My point is that I'm not putting a price the shares. Rather, my point is that at 4 cents, it is nothing near fair value, even when one includes the history of this company.
All IMO. Normal Guy