LYC lynas rare earths limited

lynas valuation

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    Assumptions:

    -LAMP achieves & maintains production status
    -Production of 11m kg / year (Phase 1)
    -Production Costs of $15/kg
    -Number of Shares 1.7bn
    -Tax of 15% (guesstimate combining royalty and portion of taxable revenue in Oz)
    -Contingency Costs/Sustaining Capex 15% of revenue
    -P/E = 12

    At Basket Price (BP) of $50
    -Revenue = $550m
    -Prod Costs = $165m
    -Sustaining Capex/Contingency = $83m
    -Simple Earnings Before Tax (SEBT) = $303m
    -Simple Earnings After Tax (SEAT) = $257m
    -EPS = 15.125c
    -SP = $1.83

    NOTE: This is with Basket Price (BP) of only $50.00/kg

    At BP = $55, SP = $2.11
    At BP = $60, SP = $2.39
    At BP = $65, SP = $2.67
    At BP = $70, SP = $2.95
    At BP = $75, SP = $3.24
    At BP = $80, SP = $3.52
    At BP = $85, SP = $3.80


    If the P/E = 15, we would need a BP of $74.29/kg (under the above assumptions, for Phase 1 only) to achieve $4 SP


    NOTE: This is based on Phase 1 ONLY and includes (IMO) considerable commercial contingency.


    Based on 22m kg/year (under above assumptions, P/E = 12):


    At BP = $50, SP = $3.65
    At BP = $55, SP = $4.22
    At BP = $60, SP = $4.78
    At BP = $65, SP = $5.34
    At BP = $70, SP = $5.91
    At BP = $75, SP = $6.47
    At BP = $80, SP = $7.04
    At BP = $85, SP = $7.60

    Hopefully this provides some perspective and if anyone has refinements to propose to the above, please post and I'll attempt to include them in my calculator and re-post the values when I have time.

    Cheers

    Freighter
 
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