new val at $2.43, page-26

Southern Cross Equities - quote from the above:

"Our valuation of SDL with its current share in the project is $1.09, however following financing and re-structuring, our diluted 12 month valuation is $0.77, which rises to $2.43 at spot prices."

Why-if scenarios (increase in spot prices):

I sent to one of my mate the following infos two months ago. Now I'm more confortable to disclose my modeling:

Model1: 35Mtpa / 25Y mining with FOB price=US$100
Avg FOB price(DSO)=US$100/t (changed from US$63.12/t)
Avg FOB price(Concentrate/Pellets at +65% Fe)=US$100/t (changed from US$66.30/t)

NPV per share = A$2.95
Project IRR = 46%

Model2: 35Mtpa / 25Y mining with FOB price=US$130
Avg FOB price (DSO) = US$130/t (changed from US$63.12/t)
Avg FOB price (Concentrate/Pellets at +65% Fe) = US$130/t (changed from US$66.30/t)

NPV per share = A$4.82
Project IRR = 65%

A good outcome is that higher spot prices will bring more cashflow and reduce the payback periods, hence the noticeable increase in SP and IRR.

Cheers,
BS