not too shabby eh!, page-58

Everybody else has had a crack at the numbers so heres the numbers that I came up with from todays announcement. Enjoy.


Annual Production

1Mt ore = 11,780 Cu
2Mt ore = 23,560 Cu
3Mt ore = 35,340 Cu

Assumes:
- 95% recovery rate on Cu
- No Au recovered
- No Co recovered



Costs

Mining Costs (LOM) = AU$13.60 / tonne
Processing Costs = AU$14.07 / tonne
==============
Total cost ore = AU$27.67 / tonne

Plus fixed annual company costs
- ongoing exploration and company expenses = AU$20,000,000
- borrowings costs = AU$16,000,000
==============
AU$36,000,000



Revenue

Cu current price = US$3.50 lb : AU$8,100 tonne

Cashflow per 1 million tonnes of ore processed: (11,780 tonne Cu * AU$8,100) (1,000,000 tonne ore * AU$27.67) = AU$67,748,000

1Mt annual ore processing = AU$ 67,748,000
2Mt annual ore processing = AU$135,496,000
3Mt annual ore processing = AU$203,244,000


EBIT by year
- 2012 (1Mt) = AU$ 67,748,000 AU$20,000,000 = AU$ 47,748,000
- 2013 (2Mt) = AU$135,496,000 AU$20,000,000 = AU$115,496,000
- 2014 (3Mt) = AU$203,244,000 AU$20,000,000 = AU$183,244,000
Total by 2022 = AU$1.812 Billion

NPAT by year
- 2012 = $31,752,420 or $0.22 per share
- 2013 = $76,804,840 or $0.55 per share
- 2014 = 121,857,260 or $0.87 per share
Total by 2022 = AU$1.2 billion plus AU$543 Million in franking credits



Current CDU share price

It would appear that CDU may currently trading on a multiple of 2.39 times 2014 profits based on the above calculations. Both earnings and resultant profits could be quite conservative given that they exclude Gold and Cobalt all together and dont properly factor in native copper. Additionally they assume no value in any of the prospects beyond the 30Mt initial resource despite a provision of $20mil PA in the above numbers for ongoing exploration and other activities. The JORC indicates that the 30Mt is just the low hanging fruit. They also assume a three year rump up period and no upgrade to processing capacity beyond 3Mt PA.

Given the ramp up period, the initial mine life for the high first 30Mt would be 11 years and return profit of $1.2 billion. This infers earnings per share of $8.57 over that period or 412% of the current share price. As most of the profits should be paid to shareholder in the form of dividends the Australian franking credits of approx $3.87 per share should also be considered as this would be important and add significant value to shareholders beyond the raw earnings.

I believe these numbers are very conservative but for the sake of avoiding a slanted view either way Ill just use the raw numbers that I believe we all know. Everybody needs to reach their own conclusion as to what a fair SP should be based on the numbers. As such I wont quote a share price valuation. I leave that up to you.