| Flagship Project | Round Top |
| Mineral Resources (M&I) | 307,260,007 kg REOs |
| Shares Outstanding | 46,686,252 |
| Market Cap | $14,005,876 |
| Average Annual Production | 10,754,100 kg |
| LoM | 20 Years |
| Payable REOs | 215,082,005 kg |
| True All-in Cost (TAIC) | $21.43/kg. |
| Gross Revenue | $7,764,424,000 |
| Texas State Royalty | ($487,476,000) |
| Gross Income | $7,276,947,000 |
| Total Operating Costs | ($2,213,683,000) |
| Operating Profit | $5,063,264,000 |
| Total Capital Costs | ($845,000,000) |
| Income Taxes | ($1,063,285,440) |
| Net Income | $3,154,978,560 |
| Net Profit Margin | 41% |
| Absolute Cost Structure (ACS) | 39% |
| True Value (TMRC, 30%) | $20.27/sh. |
| Cash Flow Multiple | 5x |
| Annual Cash Flow (TMRC, 30%) | $47,324,678 |
| Future Market Cap | $236,623,392 |
| Market Cap Growth | 1,589% |
| Target | $5.07/sh. |
Notes: All Values in U.S. Dollars
Update, 9 September 2019
Gustavson’s August 2019 revisions to the Round Top PEA had a negligible impact on Fahy Capital Management’s independent analysis. In fact, the updated PEA is more in line with our own assumptions. Consequently, we don’t feel compelled to revise our expectations.
2 Comments
Does a resolution to the trade war temporarily drop the price back down?
Mike,
It certainly could. Additionally, SC Fundamental Value put pressure on shares at the peak of the last run up. I don’t know what their long-term strategy is; I was surprised to see them sell a bit ahead of the trade war de-escalation. They had, clearly, foreknowledge —- lead time of about 24 hrs.
$TMRC is a long-term holding of ours and we have no intention of trading around a core position. Were shares to drop another 30%, we’d double our stake.
Have a great evening.
Tom