A shot at a 10 bagger from here?
Thinking more about what might move NXE other than an upward move in the spot market or a takeover offer, I assume once mine development permits are in hand, NXE will enter into some term contracts north of $50/lb before making the go ahead decision and announcement (Leigh has stated that today, he could enter all the contracts he could want at north of $50/lb). A development decision and contracts in hand would allow the market to discount cash flow from the projected date of production. With debt financing, once in production, NXE could cash flow at least $3/share. Assuming a 10 x multiple, or a $30 share price, discounting that over say two years during the construction phase at a 10% rate, should make a $25 stock price a reasonable expectation, even if spot remains in the low to mid $20's. I assume a Final Feasibility study will take about 1 year after the upcoming PFS (late 2019). Arrow would be a small mine. I don't see why a mine and mill can't be built in two years from the "go" decision. So if permitting is started while the FFS is in progress, and completed within a year of the FFS (LATE 2020), and there are no hickups, I don't see why Leigh couldn't have Arrow in production by early to mid 2023. The big unknown is Federal gov't permitting. So, if all goes well, where else is there a good shot at a 10 bagger in the next 2.5 years? |
