what will tonkin do?, page-8

Back of envelope scenario 1:

Murchison on C&M

503M shares
Mt Magnet producing 175,000 oz @ $500 margin/oz
175,000 x $500 = $87,500,000 revenue pa
Divide $87,500,000 by 503M shares on issue = +17.4c/share

Further, if Murchison was currently losing $1000/oz over a year's production of say 60,000 oz, SLR would be bleeding $60M pa if not rectified!

Add $60M onto Mt Magnet revenue for one year = $87,500,000 + $60,000,000 = $147,500,000
Divide $147,500,000 by 503M shares (the case with Murc shut)
= +29c/share

Scenario 2:

Murchison operating

Mt Magnet revenue 175,000 oz x $500 margin/oz = $87,500,000 revenue pa (same as scenario 1)
Subtract Murchison losses pa @ $1000/oz: $87,500,000 -$60,000,000 = $27,500,000 only revenue pa
Divide $27.500,000 by 437M shares on issue (pre-CR) = +6c/share

Illustrates that closing Murchison wasn't such a mistake and does indeed set SLR up for future development and growth. Makes the difference of being barely viable (just churning cash) @ +6c/share compared with being very profitable at actual earnings of +17.4c/share (11.5c/share better off) or +29c/share, depending on your view point.

Just my own rough calcs, not a mgt paid post.