december 2011 price speculation, page-16

Illiquid,

For Lance Only:

Lets say for the first 2 years prodn, avg is 1.5M lbs and during that time they ramp up so they avg 3.0M lbs over the next following 2 years
Lets say on avg contract price is $US65/lb and everything goes to clockwork over those 4 years then:

yrs1,2 avg net profit after tax is: $AUD42M SP: 27c PE 10
yrs3,4 : 90M : 58c PE 10

yrs1,2 %Retained earnings for exploration/rampUp/debt retirement etc : 70% avg Dividend: 1c rounded up to nearest cent

yrs3,4 %Retained earnings for exploration/debt retirement etc : 40% avg Dividend: 3c

Amongst other variables is the %retained earnings, what will they retain for further exploration, new properties, production rampup etc?? maybe mine are too high and/or low?
The less retained the higher the dividend and vice versa.

Dividend is calculated By
($YrNetProfit * (1-%retnd earnings))*2yrs*100/1.8Billion shares/2yrs

What ever way you look at it, its going to be a good little earner and if it all goes to clockwork.

* All figures and %'s above are avg per yr * based on my
own assumptions and that published by PEN re Opex,Capex
etc.
* % retnd earnings allows for exploration elsewhere eg Karoo
* SP does not reflect any new resource discoveries elsewhere
* Clockwork is my own eg maybe PEN can rampup in a year,
then yr2 dvdnd=3c.

JJ