Comparative analysisWe have 3 public trading companies that involve Ti, KRO, TIE, and VHI. Strangely they have the same Chairman of the Board (this person must be very knowledgeable with the Ti market).
Anyway, I analyzed KRO in 2010, and at that time, their most recent cost was about 88% of revenue, but since then, they have improved significantly to 65%, mostly via price increase. Now, they commanded a PE of 21 (previously 30), with Price/sale 2.24, with revenue growth of 30%.
VHI's cost is also about 64% of the revenue (similar to KRO), but commands a PE of 91, price/sale 4, about 27% growth in revenue.
TIE cost is 80%, PE 35, Price/sale 3.7, 15% growth.
Now, we use the same criteria to value RGX. The RGX operation cost will be 50%, and it will be lower than the numbers from KRO, VHI and TIE, in fact RGX will be lowest. But RGX will be still growing in production, so a PE of 30 will be reasonable. When the PEA is available (in Sept. 2011?), every one can estimate the RGX share price target. If the processing cost is lower, say 30%, RGX should command a premium in the PE, say 50 to 90 (as VHI has a PE of 91). 30% cost means $200 per tonne.
Note that the Chairman of Board of these 3 companies have bought aggressively into all 3 companies, and most recent buy is about $40M into TIE (about 2 weeks ago) and I reported this earlier. If the Chairman of Board of a Ti company decided to pay $40M CASH to buy its company stock in the open market, those interested in junior Ti companies should buy into RGX. According to a insider report, after this Chairman bought, the stock usually double in price. Just see what happened to VHI after he bought VHI aggressively earlier. We now have RGX insider buying too BTW.