bottomline case

Hi all,

With an exciting week ahead regarding the deadline thursday for Xstrata saying 'YES we will" or walking away from their option for 51% of a part of Roseby,
I just would like to make a recap of what AOH is doing in Finland.

Just because a lot of posters are underestimating the value of the
Outokumpu Copper project.
After all it's a sound and running operation which thus gives a proven, real, unrisked value for AOH !!

In the Sep 2012 Quarterly (30 oct 2012), the guidance was given, based upon the actual performance until and including Sep 2012, for a yearly production of :
- 8000 tonnes of containing Cu ( 17,6 Mln lbs ) revenueing 63 mln US$
- 8400 ounces of gold revenueing 13,6 mln US$
- some silver and Zn credits as a bonus .
This totalling an income of 77 mln US$ per year for the next 10 years minimum, if the prices used ( 3,6 US$ for Cu and 1620 US$ for Au) are maintained.
The C1 costs are 1,60 US$ per lb produced, so total 28 mln US$.
Guidance for 2013 is this will below 1,50 US$.

The total free cashflow per year is 49 mln US$ (77 minus 28).
That's a 9,3 UScents per share free cash-flow, for 10 years !! (527 mln shares)
Offcoarse AOH has to pay interest and their debt (20 mln at the moment)

This with the option to ramp up the Finland operation 550 tpa to 800 tpa (about 45%) for a modest 7,5 mln US$, giving a free cashflow of roughly 73 mln US$ !
Also more Cu deposits in the vicinity to extend the Life of Mine.

So can anyone explain me why the sp should drop to 0,24 or 0,20 A$ (or even an insane 0,15 A$) in case Xstrata would walk away ??
The development of the Finland operation has matured, has been proven and may be regarded as derisked.
The present MCAP could be justified on solely the Finland operation/production in my opinion (even without the ramping up scenario).

That's MY base case. And I hope that Xstrata walks away..or taking only 51% with the obligation to kickstart the whole operation asap.
The value of an operating Roseby scenario will give AOH MUCH,MUCH more cash-flow and future returns !
Preferably with a JV partner, whichever that may be....

Looking forward to this week!