Comments on Greg Ballard's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/greg-ballard/articles http://seekingalpha.com/article/55244-shengdatech-surprisingly-cheap-during-capacity-catch-up-cycle?source=feed#comment-118500 118500 Sun, 24 Feb 2008 19:43:12 -0500 http://seekingalpha.com/article/58589-smallcap-materials-pick-polymet-mining?source=feed#comment-117794 117794 Fri, 22 Feb 2008 08:47:45 -0500
PLM anticipated in 2007 that the mine would require up-front capex & additional infrastructure of $350m in order to get the project up & running. That was at 2007 prices. And just as I used near-current sales prices for valuing the underlying reserves of PLM we must also adjust upwards this $350m to reflect commodity price increased (iron & steel etc) betwen 2007 and 2009 when they expect to incur that capex, thus a capex figure of $500m is more correct. The company had assued in 2007 that it could fund this capex by bank borrowings. Given credit market tightness in 2008 I think the best case now is that this $500m would be funded via convertible debt using a 5/4 ratio, i.e. equivalent to $400m fully diluted shares in current money.

Thus the fully diluted equity in present terms becomes ~160m shares that already exist plus approx 140m new (convertibles) shares equivalent to fund the $500m capex = total 300m shares fully diluted.

Dividing the $2bn Net Income NPV above by 300m shares gives a potential buy-out valuation for PLM of about $6.66 per share. It would be higher if the company can fund the $500m capex using more debt. On the other hand the approvals are not yet in place....

All in all this gives a much more sober picture than I had hoped to uncover and my maximum upside of $6.66 is a long way short of the potential mentioned in Greg's article above. We all like to uncover investments with hidden potential and I'd welcome any further insights people may have, especially if I've omitted something important.]]> http://seekingalpha.com/article/58589-smallcap-materials-pick-polymet-mining?source=feed#comment-117575 117575 Thu, 21 Feb 2008 08:47:41 -0500
PLM has 157m fully diluted shares. At the current stock price of $2.73 that's a market value of $428m. 3x = $1.285bn and 22x = $9.4bn. These are big numbers. If possible pls explain how you get these valuation parameters.]]> http://seekingalpha.com/article/58589-smallcap-materials-pick-polymet-mining?source=feed#comment-108230 108230 Fri, 04 Jan 2008 10:35:10 -0500 http://seekingalpha.com/article/58589-smallcap-materials-pick-polymet-mining?source=feed#comment-107646 107646 Tue, 01 Jan 2008 12:16:53 -0500 http://seekingalpha.com/article/55244-shengdatech-surprisingly-cheap-during-capacity-catch-up-cycle?source=feed#comment-103033 103033 Mon, 26 Nov 2007 08:26:25 -0500 http://seekingalpha.com/article/54289-versar-could-easily-triple-before-reaching-fair-value?source=feed#comment-102133 102133 Fri, 16 Nov 2007 14:20:24 -0500
what is you take on politics involved with this company as 97% of revenues come from government. I think democrats will lower the budget available for this sort of stuff (army, etc.....).
Also, the story in Afghan and Iraq is running to the end.
Any thoughts welcomed.....]]>