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Novadx Ventures Corp NDXFF

"NovaDx Ventures Corp is a mining company engaged in the exploration, development and recovery of coal. The company's operations are principally directed towards the Rex No."


GREY:NDXFF - Post by User

Comment by elmothefearlesson Oct 27, 2012 3:26pm
293 Views
Post# 20531214

RE: is there a light at the end..?

RE: is there a light at the end..?

People are selling at $0.025 because they are sitting on huge tax losses.  If you are very risk averse, and you're unsure whether the $0.05 placement will even get completed, you might as well just sell.  $0.025 is better than $0.00.

 

That being said, with the new CEO and a little comeback in coal on the horizon, it looks like the placement will get completed.  $40 - $50 million was sunk into NDX before this restructuring.  Some of it was wasted on the old and seemingly incompetent management team, but a good chunk of it likely went towards capital expenditures that still retain some measure of value.

 

With the recent acquisition, Rex has the potential to produce over 600,000 tpa of coal for over 50 years.  The all in cash cost is $150 / tonne (maybe Roling will be able to achieve some operating efficiencies), meaning that at $175 coal they're still earnings $12 million a year, plus whatever they get from Rosa.  

 

If you think coal will stabilize around $200 / tonne, NDX is a grand slam at $0.05.  At $200 / tonne we are looking at almost $30 million cash flow / year.  At $0.05 this thing is valued at about $35 million.  Easy triple to $0.15 ($1.50 post consolidation).

 

You can't fault people for selling, this has been an ugly story.  But, if you have been keeping up to date, it looks like it may be getting a little bit rosier.  We just have to wait and see if the placement gets done.  It will be ugly if it can't raise cash at $0.05.

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