Ann: FY 2017 Results Presentation, page-103

I have had time now to have a detailed look through the FY2017 Statements and used them as the basis for constructing my FY2018 Forecast. Some comments first on FY2017.
1. Commercial Production ("COP")was declared on 1/5/17. Production prior to that date was 40kts Spodumene  so all associated Revenue & Production costs have been removed from P&L Account and capitalized into PPE.
2. Finance costs incurred prior to COP have been removed from P&L Account and capitalised. These will be amortised against future EBITDA.
3. The D&A charge = A$28m for FY2017. This is only for 8 months. (Since COP) so the charge for a FY2018 = A$41m.
4. Other Expense = A$24m. This is Corporate Overheads ("COH") and includes a non cash item = A$12m for Share Based Payment Expense. This is generally a one off expense so can be ignored in FY2018. COH can be set at A$12m pa
5. The cost associated with Canada & Argentina was A$0.541m in FY2017 so can be ignored in FY2018
6. The Tax Charge was an unusual technical adjustment and can be ignored. GXY has about A$74m (need to see FY2017 AR to get exact number) of Australian Tax losses to set off against future Australian PBT.

My take on the FY2017 Financial Statements and a FY2018 Forecast is as follows:

	Column 1	Column 2	Column 3	Column 4
0		Units	FY2017 Act	FY2018 Fct
1	Spodumene Sales	dmt	113,467	200,000
2	GXY Li2O Grade		5.77%	5.80%
3	Market Price Li2O 6%	US$/dmt FOB	850	900
4	GXY Realised Price	US$/dmt FOB	817	870
5	AUDUSD		0.75	0.80
6	Ci Cash Cost	A$/dmt FOB	495	410
7	Royalty		6.42%	6.42%
8	Revenue	A$m	125	210
9	C1 Cash Cost FOB	A$m	56	82
10	Royalty	A$m	8	13
11	Corporate Overheads	A$m	12	12
12	Non Recurring Expenses/(Income)	A$m	9
13	EBITDA	A$m	40	103
14	Depreciation & Amortisation	A$m	28	41
15	EBIT	A$m	12	62
16	Interest	A$m	6
17	PBT	A$m	6	62
18	Tax	A$m	6
19	PAT	A$m		62
20	NOS (Shares + Options)	m	484	484
21	EPS	A$	0.00	0.13

On a FY2018 Forecast of EPS = A$0.13 my maximum fair value ("MFV") for GXY = A$0.13 x 20 times (Generous!) = A$2.60.  Current GXY SP = A$3.28 versus MFV = A$2.60 hence my current shorting strategy.

Nevertheless all my own stuff and please always DYOR