sp valuation re-visted ( after tax of 30% )

This version is based on an after tax calc allowing 30c in the $ company tax rate:

Assumptions:
1,750,000,000 shares on issue ( includes all current options)

Costs $9 per tonne ( conservative as LYC argues $7 )

Basket price $108/kg ( then apply a 5% reduction in basket price that applies for early customers who sign up to long term contracts )

PE 10:1 ( the basis for this multiple is the likely 10 year supply contract for the Sojitz deal in the LYC announcement dated 24th Nov10 effectively guaranteeing earning for this period )

$10m HQ costs pa

Tax Rate 30%

Valuation scenarios:

11,000 tonnes mined earnings 41.6 cents per share. PE 10:1 share price $4.16( ...might have to start the splinter $5.95 club club!! )

22,000 tonnes mined earnings 83.6 cents per share PE 10:1 share price $8.36

The market will value a company on a P/E basis somewhere between 8-15 times earnings if it was a public company. You are better off to use a conservative price to earnings ratio. 10 just equates to locked in customer contracts - sojitz TBC.

CONCLUSION:

Traditionally 3 years out earnings is what is used as a harvest time frame for valuation purposes so that puts us in the $8 range once the 22k volume is "locked in" and the LAMP delivered assuming basket price stays at $110/kg.