DML forecast that they will start production at Boseto early in Q2 next year. By mid year they should be in full production and shares, in my opinion, could then be valued as per the following: Planned production of 34,000 t of Copper per year equates to 75,839,018 lbs pa @ $4.00 per lb. would create annual revenue of $303.35m. If we apply a PE of 4 (very conservative) we get a stock market value of $1.2134B for the company. Divide this by the number of shares in the company (302.2m) and we get a share value of $4.01. Keep in mind that this valuation assigns no value whatsoever to any other DML assets except Boseto. If all goes well and Zeta develops into another Boseto we would be looking at $4.01 x 2 = $8 per share in 2 - 2.5 years. Plus we have further value accruing in other DML assets, particularly Ophion, which currently has a 75 hole drill program being undertaken.
Some may feel I have been generous with the copper price but it's currently $4.20 and I can't see it coming down below $4 for a long time - I have balanced this by being very conservative on the suggested PE of 4.
DML Price at posting:
$1.21 Sentiment: LT Buy Disclosure: Held
