GREY:NMKEF - Post by User
Comment by
Charleneon Jan 02, 2020 12:57pm
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Post# 30511529
RE: This is a very good project.
RE: This is a very good project. $8bn valuation is a little rich...:) The 2.3bn valuation uses the DCF (discounted cash flow) method. But, that valuation also includes the negative cash flow (i.e. $850M) for the investment required. After the investment is made, the valuation is $2.3bn+850M = $3.1bn. Another way to value a company is using multiples e.g. P/E. at a 12x P/E multiple using the projected cashfow ($280M), the valuation is $280M*12 = $3.3bn. This valuation is at current Li pricing and no debt (no Nordic bond).
Yes it is a very good project. There should be a lot of interest. It is very DIFFERENT from Stornoway Diamond. Stornoway was in production and losing money - with lower prices on the horizon. Even at 50% lower prices of Li, Nemaska will make an operating profit and cash flow. It is also a material that will be in significantly higher demand 2,3 and 5 years away. The recent drop in Li price only serves as an accelerant to generate more EV sales as EV become price competitive with gas-powered vehicles.