Almonty Industries Inc T.AII

Share Price Based on Future Free Cash Flow - Thoughts?

[blueskies]

I though the most recent presentation by Lewis at the IIF was very informative and helpful for trying to start put a number on a fair share price. 

The financing discussion at about 12 and 1/2 minutes was useful in terms of Lewis talking about $10-12 million in free cash flow for 15 years at the minimum offtake agreement price and at 45% of production capacity. This is a nice baseline for valuation. If I go with a 10% return that puts me at about a $120 million usd valuation of 45% of Sandong's production at the minimum tungsten price, or $0.72 cdn per share. Remember, this is just for 45% of Sandong at the lowest price Almonty will receive for tungsten.

Now lets do some assumptions:)

Again, using minimum tungsten prices but assuming the value of the full production capability, that puts the share price of Sandong at $1.60 per share, again, using only $235 as the tungsten price.

Add in value from Almonty's other properties, easy to imagine a share price of closer to $2.00.

Now, more fun, let's go with the free cash flow from the IIF presentation around the twenty minute mark (slide 19 in the presentation). The presentation used for IIF is also now available on Almonty's website, I'm pleased they have updated that presentation now.

This shows Almonty's free cash flow, in 2025, at about $50 million usd. I'll go with ten times free cash flow again, feel free to put your own value on it. This puts the value of Almonty's free cash flow from tungsten production from all mines at about $3.00.

For me, on an annuity style investment with 90+ years of mine life, 10 times free cash flow doesn't seem unreasonable, but again, everyone has their own valuation of free cash flow.

In the dream scenario, Almonty also signs agreements for the downstream project, produces additional free cash flow from this, adds some more cash flow from the Molybdenum, and maybe adds another producing mine over the next five years with more low interest funds from KFW. 

All this said, I see a pretty clear path for Almonty's shareprice to increase from current levels up to $2.00 - $3.00 in the coming years as they get closer to production. What I can only wish I knew is when will the market take notice and decide that production and cash flows are certain enough to justify these valuations.

I think it all starts with the announcment of the drawdown letter in hand, and could accelerate quickly if the negotiations on immediate production increases and downstream production are finalized and detailed for public consumption.

Good luck all.

[QuarterDollar]

Hi Bluesky, My comments...... A risk rate of 10% is too high because that rate is for high risk projects.  This is a low risk project 3m Libor plus 2% which was 3.5% . I think you should use a risk rating of 5%-6%. Annual profits will be around $60M-$70M per year, with the virtical integration excluding Moly. $70M return on 210M shares is $0.33 per share If the rate of

[blueskies]

Nothing personal taken, I don't see it as snarky but as useful conversation. I will offer a couple of comments to clarify my thoughts because I don't think you quite I was clear enough on a couple of things based on your response. Hi Bluesky, My comments...... A risk rate of 10% is too high because that rate is for high risk projects.  This is a low risk project 3m Libor plus 2

[QuarterDollar]

Bluesky, I can see your points..... your ROI on your investment will be the (dividend paid + capital gains averaged over the number of years you owned your shares) / dollar cost average of your share purchase price.....which should still be a nice return. regarding the $1B evaluation...... in my opinion, LB is letting the market know that is where Almonty will be once the market wakes up