$4 club, page-2

Forgive my ignorance, but it appears you are forgetting a few things in your calculation...

1. Operating/processing costs. I believe these are around $14/kg? Is there a risk of this figure rising? First mover advantage also brings with it risks of running into the unexpected.
2. Corporate overheads and finance costs. Last quarter these were a snip under $10M, and are predicted to be right on $10M this quarter. Annualised this is around $40Mpa. These could also rise as LYC moves from a developer to a producer.

If you include these two, then you will need your basket price to be around $79 if the market is going to pay 10x earnings and price the stock at $4/share, and this is assuming that corporate and operating costs do not rise unexpectedly.

Finally, the market is paying a PE of just 8.5 on BHP and 8.25 on RIO right now, and neither of these two carry with it the high execution risk of being one of the first companies to embark on what LYC is trying to achieve.

Always remember that being the first mover in a sector brings with it the risk of falling short of expectations due to unforeseen circumstances. Who knows what lies ahead for LYC, but it is an interesting story to follow from the sidelines, and makes for a good stock to trade.

Not a downramper, just stating a few facts :)