Almonty Industries Inc T.AII

Almonty Valuation

[blueskies]

I've used a number of valuation methods for Almonty, more so for fun than anything else because I believe the analysis is very simple - Almonty, by any valuation method is worth more much more than $0.90 per share, that's good enough for me.

As for their future cash flows, if I just go off of quick estimates on cash flows I typically put free cash flow from Sandong at $25 million per year for 2023, 2024, and 2025, then $50-$80 million thereafter. For discount rates I think I can make a very good argument for using 5%, but i've considered everything from 5% - 11%.

Using the above estimated cash from Sandong, discount rates, and a share count of 215 million I can get anywhere from $1.43 per share using 11%, $25M then $50M, and only counting cash for 15 years, all the way up to $6.65 per share using 5%, $25M then $80M, and counting cash for 90 years.

What's my valuation using this technique, well somewhere between $1.43 per share or $307.865 million and $6.65 per share or $1.43 billion. Lol, pretty big range.

If pressed, I expect cash flows from Sandong to be closer to $80 million annually once it's fully going than to $50 million, for me, I don't like counting cash flows from more than about 20 years down the road so I typically stop around there, I think for now, before we start operating Sandgong 8% is a high but reasonable discount rate, so I put just Sandong Tungsten at about $3.07 per share or $659.603 million.

So why would I sell 1/2 my shares tomorrow for $2.00 when I think Sandong Tungsten is worth about $3.00 per share and Sandong Moly will eventually be worth about the same, well, If I could accurately predict the future that would be great but I've never met someone who can and I certainly can't.

$2.00 share for me is a profit I would be very happy with on 1/2 my position, then I can sell 1/2 of the remaining at $4.00, and hang on to the final position waiting for $6.00 with a huge smile on my face and no risk.

But hey, that's just me and who knows what I know.

[QuarterDollar]

@Blueskies...... In some aspects you have a broader range than I and I covered interest rates/risk rates of 3,5,7,10%.  I did the number crunching on profitability i.e. Plansee portion, and the SK portion with and without the WO3 plant.  LB has stated output from Sangdong will be 640,000 MTUs and I am using 550,000 MTU in my calculations which puts profits in the range of $50M to

[blueskies]

Thanks for mentioning the exchange rate, I meant to say I've left it out intentionally. I'm hopeful leaving the exchange rate out adds to me being conservative; however more so it is tied again to me not trusting my ability to predict the future. I know the current rate but expect Canadian will appreciate towards USD in the coming years, but who knows it could go the other way. I include

[QuarterDollar]

@blueskies The only opportunity Canada's currency will ever approach or exceed par with US currency is when the world or North America is coming out of a major recession. Canada is resource based economy and resources are one of the first things that is in demand when coming out of a recession. The US economy is like a the big 705ci Chevy block engine and Canada is the two stroke

[lonade]

geez you guys have been busy..away for some time and there is loads to read, again... :-) just to add a few words to my short and simple view to this investment (at the moment). since the final signing of the financing this investment has been de-risked, all that follows afterwards is just business as usual for a project. the hickups along the way are normal. Lewis has made the driver for this

[QuarterDollar]

@Ionade,  I am going to disagree with some of your points I have owned several juniors that owned billion dollar assets and were bought for pennies on the dollar where shareholders only got 30% more than the current share price. Very much like where Almonty is today.  A takeover offer will never give us a fair valuation. I will only consider a buyout offer after the moly is in

[lonade]

let me answer to each point: - to the buyout: I am certain that none of those bought at those low values had the insider ownership, share structure, company value, longterm mine resource we have. let me remind you that we not only have insiders with more than 20% to avoid a forced squeeze out, but also enough votes (more than 50%) to stop any low buyout offer. Plansee surely have their own agenda

[QuarterDollar]

Ionade, you make very valid points and yes if there is a potential take out, I expect it to come from Plansee who has very deep pockets. The companies I spoke of that were taken over are well over a decade or two ago. Any yes you are totally correct, we have an extremely rare and perhaps once in a millenia type of configuration.  Our configuration doesn't conform the norm

[5ilverlining808]

South Korean Govt. should have first dibs over Plansee. If you need an explanation I will answer tomorrow.

[QuarterDollar]

I am curious to hear your rational behind that 5ilver, because LB has already stated GTP gets their 45% first and the rest goes to SK Industry.

[5ilverlining808]

I forgot about that. 2nd dibs then.