Back-of-the-envelope valuation for DMNKF
Friend of mine interested in purchasing shares asked me to come up with a valuation. Told him that there aren't enough data points/numbers to do it properly, so he asked for a "reasonable, educated guesstimate" instead. Maybe the following nonsense that I sent him will be useful to some of you.
Using a basket of 27 graphite companies' market caps, I got an average of CAD $ 27.22 M, and rounded down to US $ 20 M. I omitted MC's of companies like Magnis, Mason, Syrah, etc. to be as conservative as possible.
Using 120 M shares, as an estimate of the DNI OS 18 to 24 months from now (around the time that Vohitsara production should begin), 20 / 120 = US $ 0.167
US $ 15 M = two years of gross revenues for DNI from Vohitsara at 10,000 MTA, with an average basket price of $ 1,500/mt. (Rounded down from 12k MTA & $ 1,600+/mt used in the DNI presentation.)
So, at some point after the PP/dilution is completed, I expect DMNKF to eventually reach a range of $ 0.125 to 0.167 PPS, on Vohitsara alone. (DNI.CA = ~ C$ 0.165 to ~ 0.225)
May even have to wait until the PEA is published, around October, before there is enough recognition/revaluation - who the hell knows.
Also, the wholesale business generates ~ US $ 500k profit for every 2,000 MT shipped, so if GLK alone ramps up to sell another 8,000 MT wthin the next two years, that's an added $ 0.02/share to the above range.
Again, this is a conservative valuation, with all non-core assets (Alberta/SBH, Attawapiskat, gold royalty, et al.) at zero.
This range is subject to change on numerous factors: drilling results, private placement subscription %, new acquisition(s), possible uplistings, offtake agreements, sale of SBH, etc... way too many variables at this time.
Trying to be as realistic as I can.
