in all fairness, page-8

Supermapes

I like the DCF approach but how do you fund the plant development. Presuming that you get EV and divide by number of shares. If this is just negative cash flow than the number of shares in issue stay the same. However if the build requires equity that requires shares to be issued than I dont put the cash outflow in but increase the number of shares the EV is divided by.

I must say I had a model that worked more along the lines of profit and PE divided by number of shares. The mixture had a mix of debt and equity which you could adjust.

However just to illustrate a factor that I never took into account.

I assumed that the Vic plant gave you a feasibility so I never envisaged having to issue shares to get a feasibility. Nor did I envisage a deal outside of Alcoa as the first.

So we have now issued 12m shares and out of that I get a feasibility but still have to build a plant. Plus we are paying (it seems) 100% of the feasibility or is $12m 50%. Not sure.

I have no problems in the telephone numbers the EV creates its the number of shares in issue that has me stumped and the time it takes to get there.

Lets just look at a few curve balls - Where is it best to spend our cash flow - Build a gold mine or build AL plants in USA. Why pay a dividend if we are going to have to raise cash so how long before you are able to pay dividends.

How much gearing is safe and at what rates of interest - USA looks like a great place to raise debt given low interest rates but is there appetite for it without a plant - Is this why we need a feasibility.

I sold 3.8% of my portfolio today so that I have some cash out now to actively get back to finding a few more stocks to invest in. My price is also much higher but if you asked me how high the range of values are quite large. I dont think its worth less than $3 but above that so many things have to be factored into it.

As regards Silica and Gold I just add 50c as there are only so many variables you can have in an equation before you may as well just take a random number.

I wont be selling anymore unless it goes a lot higher.