Company: Replenish Nutrients ( formerly known as Earthrenew)
Listings: CSE Canada , Frankfurt and US OTC
Tickers: ERTH / VVIVF / WIMN
Market cap at time of publication: $14.9 MCAD
Stock price at time of publication: $0.105 CAD
ESGFIRE Target price:o.35 CAD
Business: Regenerative agriculture
Our largest portfolio holding ,Replenish Nutrients (Formerly known as Earthrenew), yesterday (12/7) reported that they have secured $7 million in non dilutive grant financing from Emissions Reduction Alberta (ERA). The funds will provide the company with the equity required to fund their ready to build regenerative fertilizer manufacturing facility “Debolt” which has already secured all necessary environmental approvals. The remaining funds required for the facility have been secured through a loan term sheet .
Once ready the Debolt facility will have a capacity up to 50,000 metric tons equaling annual revenues of $20-25 million (ESGFIRE projection using $400 / ton). Combined with already existing facilities, Replenish Nutrients will be able to target a combined revenue of $40-50 million annually (ESGFIRE calculation using $400 / ton).
Our opinion is that the news of the $ 7 million in grant is a true gamechanger for the company as all doubts regarding the company’s short term need to raise money through equity . Thus, further dilutive is no longer a short term concern. Our opinion is also that the grant shows validation for the company’s technology.
It’s also worth keeping in mind that the company recently have reported progress on licensing revenue discussions alongside a stunning product superiority of 61 % higher return on investment (compared to grower standard products).
Our current fair share price of the company after today’s news is $ 50 million CAD or 35 cents per share and is based on a projected future sales multiple of X 1,25. Our opinion is that the company deserves to trade at a premium compared to the much larger industry peer Yara International (valued at 0,54 X sales for 2024) . We base the premium sales valuation on the news reported by the company that they have a proven superiority in their fertilizer product and also a massive licensing revenue potential (not included in the $40 million in our future projected sales) . The licensing revenue will likely provide very high margin revenues. Our opinion is also that the company soon will be able to charge a premium for their products which will increase potential futur sales beyond $ 40 million annually.
This post is based upon reliable sources, namely regulated press releases from the company , as referred to above. Nevertheless, this post may contain interpretations, estimates, or opinions of the authors, or other non-factual information.If that is the case, this is continuously stated above.
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projections, forecasts, or similar have been conducted based on EV/SALES multiple calculations .
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authors. This post is written by Filip Erhardt, at ESGFIRE , published at July 13th 2023.
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