Banter and general comments, page-12448

Hey everyone,

When I need cheering up (since we are more than 50% off our highs), I do this little calculation - what should the SP be when in full production, sometime during CY2023? A lot of people are saying "$2 easy" but I wanted to work through the arithmetic. Here we go:

Production: 173,000 tonnes 5.8% spod concentrate (from the updated DFS presentation Aug 21 - they stated they could go up to 197kt but let's be conservative)

Pricing: FOB price US$5000 (latest reported price is >$7000 but that's for 6% and spot pricing, not contract).

Operating Cost: US$362 (from DFS) - let's make it US$500 to allow for inflation

Gross annual profit: 173,000t * (US$5000 - US$500) = US$778m = A$1.1bn (@0.70 - current exchange rate is more favourable)

Less royalties, overheads, taxes (say 40%) gives annual NPAT of A$667m.

Using a PE of 8, MC should be 667m * 8 = $5.3bn.

With 1.7bn SOI, the SP should be $5.3bn / 1.7bn = $3.12 per share

So that certainly made me feel better. Where have I gone wrong? Where has the market gone wrong??

Thanks in advance for any corrections to the above.

Figaro