IPO Estimated PriceWe now have sufficent information to contruct what the share price might be for the HK IPO.
This info comes from the HKEX documentation plus other info posted here by myself.
All numbers in USD, converted at 1 to 7 RMBI.
We have..
Current shares o/s ..... 1,048,000,000
Persistence Shares after Consolidation = 80 m
Consolidation Ratio ..1 for 13.7
Persistence = 75 % ......750 m
MJS 94 % ......................700 m
MJS will own 50.1 % after IPO
ie... maximum shares after IPO Raise = ( 700 m / 0.501 = 1.4 billion )
Shares Post Consolidation = 100 m
MJS shares = 50 m
Additional Persistence Shares Dilution ( 1105 m - 750 m ) = 350 m
Funds to be raised..
300 m RMI ......................$48 m for First Acquisition
Loan Paydown.................$12 m
Working Capital...............$ 30m ( my estimate )
Total IPO funds.................$90 m
Estimated IPO Share price = $90 m / 350 m = $0.257 US = $0.33 CAD ( $4.50 CAD ) Post Consolidation )
Persistence Market cap after Consolidation = $360 m CAD
Total Market cap after IPO and Consolidation = $450 m CAD
Majestic owns 50.1 % = $275 million CAD
Majestic Share Price post IPO and Consolidation = $275 / 50 m = $5.50 ( $0.40 /share )
SUMMARY
We wil have an estimated four fold increase in the share price of MJS from $0.10 today when the HKEX IPO is approved and launched under the documented information provided above.
Those metrics show that the most likely IPO price will be in the $0.25 US to $0.30 US range .
I note that the post IPO market cap is $450 m CAD which corresponds quite well with the current fair value based on free cash flows at 40,000 ounces of $30 m CAD times 15 .
That is, the IPO price is the current fair value , with multiples of upside coming above that from 2-3 times increase in production and a cash cost about 1/2 of the current .
Quite logical and easily saleable IPO