RE: RE: RE: RE: RE: RE: NovaDx, Sandstorm close Te Oops I goofed on the SND share ownership number :)
Our previous investment of $30 million converts as follows:
- $10 million turns into the royalty at $4.50, falling to $2.00 / tonne after we recover $10 million
- $10 million into a debenture bearing interest at 8%, convertible at $0.10 / share
- $10 million into equity at $0.05
Then we are putting in another $7 million at $0.05 / share.
Total # of shares owned by SND will be: 340,000,000 ($17 million / .05)
Total shares outstanding assuming $15 million raised: 80,000,000 currently o/s, 340,000,000 from SND's interest, and an additional 200,000,000 from the remaining $10 million raised from outside investors for a total of 620,000,000 shares outstanding
If we raised $25 million successfully, it would put us at 820,000,000 shares o/s.
So if they only raise $15 million we will own about 51% of the company. At $0.05 / share it would place the market cap. at ~$30 million, which is pretty cheap assuming they are generating $14 million / year. I'd venture to guess that this thing should trade at ~3x - 5x cash flows, which would put the share price closer to $0.07 or $0.08 / share. At $0.07 / share our 340,000,000 shares would be worth ~$24 million, with a cost of ~$17 million.
So... if we raise the $15 million... and Daniel gets the thing back into production... and coal prices kinda just stay where they were in April 2012... we have a good chance to get back everything we invested + more.
Remember, Nolan once believed NDX would be worth between $200 - $300 million based on its assets. Hopefully there is some middle ground between the $2 million it is currently worth and that number! I wouldn't mind taking 51% of $150 million. A cool $75 million for something besides coal.
Note, SND is investing $7 million, $5 million as part of the private placement, and is providing a $2 million working capital loan that is also being converted to equity when the placement completes.