AMSE has huge blue-sky potential. Of course, each investor should discount the ultimate upside in the stock based on his/her own view of the likelihood of reaching the blue-sky potential. But, the bull case is $10 per fully-diluted share, (pro forma for the $75 million capital raise coming early next year). Note, not all of that $75 million will be equity, there could be a debt component.
At first blush, $10 per fd share sounds wildly optimistic. It would probably take 2-3 years to get to $10/share, but if AMSE can 1) get permits issued 2) raise $75 million of equity + debt and 3) get oil flowing by 2h 2016, then the probability of the company being able to fund, build and ramp up a 50k bpd facility 4-5 years later goes way, way up. Since the permitting and funding hurdles are closer to 1 year away, I think the stock could comfortably double or triple within 12 months.
How much of a haircut should AMSE receive for it's funding and permitting risk? Well, those are important challenges for sure, but compare a raise of $75 million with a raise of billion(s) for some potash and iron ore juniors. Compare 2 years until 1st production with 5-15 years for some oil & gas, potash and uranium juniors. Compare infrastructure access in Utah to that of Africa or central Asia. Compare rule of law in Utah to that of frontier or emerging countries in Africa and elsewhere.
AMSE is highly speculative, but the KEY risks of permitting and funding for a project in Utah seem to me to be mild (on a relative basis) to the myriad of risks facing so many other natural resource companies. Yet, the BIG upside remains for both AMSE and those other high risk plays.
