RE:RE:Taseko Mines Provides Construction UpdateThat depends on whether TGB is a cash taxpayer or not. If TGB pays $20 million per year in cash taxes, then a $100 million tax credit, for example, would boost free cash flow by $20 million per year for five years. The tax credit will eliminate the need to pay the annual $20 million to the IRS. If the investors were rational, that would boost market cap by the present value of a $20 million, five-year, cash stream, holding all else equal. Using a 5% discount rate, that present value would be an $86 million market cap increase.
TGB has about 300 million shares out. So $86 million onto the market cap would boost the share price by about 29 cents, or about 12% of the current US price for TGB of $2.35.
The tax credit becomes less impactful if TGB is not a cash taxpayer as the actual cash savings from the tax credit get pushed further out into the future to years in which TGB expects to be a cash taxpayer.
So the value of the credit has many moving parts.