spin off value assumptions..., page-58

Resource value:
What is...1,900,000lb x $113/lb = ? (113/lb x 2204 lbs per tonne = $249,052 per tonne of U)
=$214,700,000

Potential profit:
What is...$700/t - $100/t x 300,000t = ?
You allow $100/tonne or 4.5c per pound of uranium costs???? Being that there are 2204 pounds per tonne.
i have never seen costs this low anywhere but lets assume they are making $112.955 per pound profit.

so profit is $214,614,500
New entity has max 70% of this ie $150,230,000 which doesnt allow for capex or the royalties

Potential timeframe:
What is 75,000t per year into 300,000t = ?
they have 862 tonnes of uranium. so mined over 4 years that would be 216 tonnes per annum.

Anualised projections:
Divide potential profit into potential timeframe = ?
$150 million / 4 years is $37,500,000 per year
EPS:
Divide anual profit into 75m shares (assumed) = ?
= 50c
Apply PE of 5 = ?
= $2.50

these are fundamentally flawed figures.
1. profit will not be $112.955 per pound.
2. no cap ex allowed for
3. you value the company at $187 mill which is higher than the value of their resource.
4. that makes companies like PMH worth $23 billion plus
and MGO $18 bill plus.

5. you regularly value companies at 10% of insitu value which i consider is high. but that would give you an over exaggerated value of $15 mill but i would say closer to $10 mill
Below is an MMB gem wher eyou explain your valuation method.

"Discounting the high grade results from the transported materials, and paying greater attention to the average grade of all test samples,we come up with the following potential parameters…

Cu @ .5% (recoverable) x 16m tonnes = 80,000t Cu = $800m
Ni @ .2% (recoverable) x 16m tonnes = 32,000t Ni = $1,088m
PGM's 4.5g/t (recoverable) = 2,314,800 oz (assume av $800/oz) = $1,855m
Silver?
Zinc?
Total in-situ value (recoverable) = $3,743m…or… $3.74 billion
An applied market value of 10%of inground (assuming an economic resource) gives us a market cap of $374m…or about $5.67 per share.
Add cash, and other assets and you get about $6.00 per share."

I am wondering why you have chosen to value this U entity on the PE method rather than % of insitu value?


i trust i have dispalyed some understanding for you.

andrewe