I can accept an 80% capacity factor on the plant, but chopping back to 2% Cu is totally arbitrary as we know that sampling has indicated 3%. So lets just leave that one alone.
Also you chose to use $2.50/lb. Really? Everyone knows using every single possible worst case in a combination is ridiculous. It will be 3% Cu and $2.50, or 2% Cu and $3.30 things tend to balance out a bit.
Continuing exploration expense is fine given that currently it is probably returning 100x the value of resource than is spent. I can live with that.
However, you have completely omitted depreciation! So remove 10% of $200m Capex from revenue ========
80% Capacity factor 3% average and the 90Kt becomes 64KT $2.50/lb. Revenue is $412m then
Cost $106m plus $20m for exploration and Admin.
Profit is then $286m but taxed on $266 => tax of $80m gives net of $206m.
Thats about $1.00 a share. Some would be retained and the rest paid out. So I suggest at least $0.80 /sh. mmm... 20% p.a. ========== and that is why you try and sneak the low Cu% in there without justification because you know the calculation is sensitive to it, gives a low value. You intention is designed to put people off.
If the % Cu is 3% as above and the price isn't $2.50 but $3.50 then the paid out dividend is $1.70/sh assuming 20% held back.
mmmm 50% p.a.
So using even modest numbers the zzedzz way, but using them correctly still looks pretty darn good to get fully franked dividends with 20-50% on the current share price.
CDU Price at posting:
$3.78 Sentiment: Hold Disclosure: Held
