ASX Shares 10 bagger

The market does not understand the value of what ADN has in the ground and the things it can be used for. Sadly at current market cap if an aggressive suitor attempted to buyout ADN to remove a competitor then they would be getting the resources for well below their intrinsic value. ADN could replicate their current project 3-4x over just with the defined resources at Great White and also have a resource at Mt Hope worth about the same as the current project.

Based on my assessment of the ratio of paints and coatings to ceramics implied by binding offtakes ( about 65% paints & coatings, 35% ceramics ) the revenue for the project could be about AUD $211M pa ( 100% basis ) and AUD $158M pa ( 75% basis to ADN ). My estimate of NPAT to ADN at steady state in this scenario is $65M.

• Imerys (closest peer) is trading at a P/E 28.0. So 28.0 x $65M implies a future market cap $1.8B. ADN has a market cap of $500M so that's 200% to 300% upside (excluding the below).

Further to the above, the Cosmetics market could potentially take ( China so far ) 40,000 tonnes per annum at USD $1,000 to $3,000 per tonne ( so another USD $40M to USD $120M per annum, I guess midpoint USD $80M ). ADN are preparing bulk samples for this and other applications to support potential offtakes or potential customer test work.

All the above applications are expected to be at margins 50% or better.

That's excluding their HPA plans - at this stage they have indicated 2,000 tpa of 5N HPA at USD $50,000 per tonne. Commercial/technical due diligence on licensing, process and plant design is underway (for reusing a design for a UK plant under license). The concept here is that ADN will produce product (at an ADN plant in Australia) to same spec as material from the UK plant and this would be sold through the same distribution channel.

2,000 x USD $50,000 = USD $100M per annum ( 5N HPA ) or more conservatively
2,000 x USD $24,000 = USD $48M per annum ( 4N HPA )

Margins for HPA would be 50%+

Plenty of other things they are doing but the above are the easier ones to determine ballpark revenue numbers.

 

One of the andromeda presentations compared ADN’s material at Mt Hope with a product from Imerys. There is similar material in part of the Great White resource.



I found the data sheet for the Imerys product ( really just for interest). Andromeda’s resource is more than ‘just clay’. It’s material capable of being processed into premium industrial minerals that have specifications that outperform established products.

 

Any 10 baggers so far this year?

 

PRL 11 out of 10bags
RNU 9.5 out of 10bags
SYA 16 out of 10 bags

I hold none of them.

 

RNU @ 0.14 .. sold too soon.

 

Bummer, but no one went broke making a profit.

 

Another interview with the NVA CEO
Nova’s Christopher Gerteisen talks gigantic gold hits, lithium exposure, and the path to production at Estelle - Stockhead

 

RAC: "Good news everyone!"
Market: "SELL!"

 

Anyone long PPK? I never buy single stocks, but made an exception for this one, my only punt....

 

Any thoughts on the uranium sector? The spot uranium price has been pumping lately

 

Anyone investing into SUV? Curious how it compares to ADN and MEP.
Kaolin and Silica sand miner

 

For any kaolin / halloysite projects (and there are many of them now) research the raw (unbleached) ISO brightness and levels of impurities such as Iron Oxide and Titanium Dioxide in the JORC-compliant resources, then make an assessment.

Low-brightness and volume of impurities affects the commercial value (pricing) and likely margins. There is also much greater competition for the lower-priced end of the market. There are in general large supplies of this grade.

The level of impurities will also affect the complexity of processing and the operating costs.

Higher impurities make a resource less suitable for production of High Purity Alumina used in batteries and other applications.

 

@wombat777 plenty of noise on the NVA forums lately bagging management & a few decisions lately

what’s your take on the consolidation/split 10-1?

Never been involved in one so wouldn’t know if it’s a good thing or not. General consensus is most people have a bad experience however I see the appeal with drawing Institutional money due to a higher SP

 

I'm supportive if it reduces the proportion of short-term traders holding the stock. Will mean less volatility for my holding, albeit there may be a short-term impact to value of my holding.

Note - I haven't experienced a consolidation.

The reasoning for it was pointed out in the Notice for the meeting:

​

Some other points:

• For future CRs/placements, they may be able to rely more on overseas funds ( that are more likely to hold the stock than short-term traders that often quickly flip shares allocated in a CR )
• At least a couple of people have speculated that a consolidated share structure could suit a future US listing ( i.e. shares also trade on one of the main US exchanges ). I think this could be a good thing in a gold bull market due to greater potential demand for the shares if they are bought more easily by US investors ( particularly if there is a move of the gold price back above USD $2,000 ). Downside of this is that people get obsessed by the different moves on different exchanges ( which are often just due to changes in the exchange rate )
• Price movement from $1.50 to $1.51 or to $1.49 is less than a 1% move. This makes it harder for short-term retail or short-term professional traders or shorters to play with the price to suit their swing-trading agenda.

 

Really hoping to see that mining lease for ADN soon.
If it doesn't happen soon, I don't see commencement of Feb 2022 going ahead.
I assume they also have some long lead items which they will only purchase following the mining lease.

 

What do you guys think of invion Ltd (IVX). 138% increase today on the superb news -
Complete Regression of TNBC Tumours and Protective Immunity

 

The below is a general set of comments on investing in Biotechs.

In general only 1 compound in 5,000 to 10,000 compounds make it all the way though to being an FDA-approved drug.

Just because something does well preclinically does not necessarily mean it will perform with appropriate safety and efficacy in humans. When things do make it into clinical trials, the results generally need to be better than current standard of care to have any chance of being approved and being a commercial success.

There are lots of hurdles and anything that hasn't been trialled in humans before will typically face 6+ years of trials.




The road is generally less risk for investors if the drug is capable of being onsold/licensed to big pharma during Phase I or Phase II clinical trial stages (although Big Pharma need to have confidence the drug will be safe and effective before partnering or making a buyout offer). The clinical and commercial strategy developed and executed by management will make or break a biotech.

Working out which drugs will be good enough is the hard part. The other element for this is does the management team have the right skills and experience.

 

Large volume so far today,bought in at 0-028 this morning --so far so good..

 

My next question was going to be ' what's next'. The next phase as Wombat said is a few years away. (Thank you Wombat for your insight) A big retract in the SP till the next news?

PS: I am still learning about the market reactions.

 

This was posted by someone to HC.



The source is InterFinancial (a corporate advisory firm).

https://interfinancial.com.au/wp-co...nancial-Dashboard_Healthcare_October_2021.pdf