what can happen, page-17

Its a tough market for sure and there are three big uncertainties right now with CFE:

1) When will Marampa get sold / listed?
2) Will the $80m MCC cash get resolved and if so then how much?
3) The ATO tax case needs resolving and how much?

Consider the last quarterly and circa $99m in cash bank account including the $72m AKI funds. It doesnt include any further taxes liable from profits relating to this sale.

Since then, this quarter the expected spend was over $9.6m, and first inflows from the Liechardt sale will only start in July (10m) on confirmation of deal.

On top of that CFE has circa $35m of listed investments, so excluding tax issues and MCC money, CFE should have around $125m in liquid assets at end of this quarter (90m Cash + $35m liquid). This doesnt include $24m leichardt, the royalties from AKI production or the $5m lady annie, which brings cash assets + receivables (excluding MCC) to circa $155m.

Current Market Cap at 31c = approx 215m

I'd suggest that the ATO issue will ultimately resolve itself and realistically its all about the up to $28m penalty. Even if the rest were due (MCC + Copperco timing issue) the money would come back to CFE in future years, and in the case of MCC who knows when this would happen if at all but if it did then would mean $80m on the plus side which would make the tax issue much more insignificant. I'd be surprised if it costs CFE much more than $10m in extra outgoings all up.

Thus taking all this into account, realistic cash+(current & future) receivables-tax issue = $145m

At 31c , gives a $70m EV to:

i) Any potential MCC court case
ii) Marampa
iii) Kukuna
iv) Sandenia
v) Rokel
vi) Australis
vii) Anything else?


I suspect what will happen from here is that come tomorrow price will go down a little into the high 20's or 30c flat and we'll probably see a big top up from TS around there and this will provide share price support for the week ahead.

If someone like JP Morgan started dumping then the SP could easily go to 20c so wouldnt rule it out completely, but i don't think this will happen.

Disclosure: I'm not holding any CFE at the moment as sold a couple of months ago, but carefully watching this week for reentry.