price, page-12

kinbasket see my previous post and price calculations which i have reposted for your and other readers benefit.
I am very confidant that my calcs are spot on and i am unsure how you come up with such low numbers.
2010 will see LYC at 1.50plus
good luck to all!!!

LYC presentation at the Hong Kong conference this week confirms that there is nothing but upside for this stock.
From an earnings point of view this is how I see it based on existing contacts and projections
Year 1 11000tons at US$15/kg less cash costs US$5/kg equates to US$110m of EBITDA
Year 2 22000tons equals US$220m of EBITDA using the same base case projections
Now based on the HK presenatation and all recent forecasts from a variety of independant experts there is projected to be "scarcity" over the next 5 years and if you see the presentation given by ARU recently they are projecting a RE price of US$25/kg. I beleive this projected shortfall has been vindicated by the significant lobbying which sunk the CNMC deal.
What does US$25/kg of earnings mean well this is big!
At US$25/kg less cash costs of $5/kg x 22000tons equates to EBITA of US$440m which on a multiple of 10 for a 20plus year mine life at MT Weld with no new discoveries and excluding upside like the phosphate mean we have an Enterprise Value of US$4.4bill with no debt (stage 2 can be cashflowed from year 1/2 earnings. This equates to a share price target of US$2.65. Remember also that LYC has 12year tax free status in Malaysia so this cashflow will be available for dividends or further growth.
Whats the downside? There isnt any as the contracts are already in place with a locked in floor price and unlimited upside which just shows that customers are just keen to lock in reliable alternatives to the Chinese in what are fast growing high technolgy green industries that need RE.
At the moment the share price is at not far above the cost that is to be spent to get the whole show up and running so what an opportunity to get in at close to the ground floor.
Happy days ahead for all LYC holders