from $1.7 take over bid to 34c

What a joke! DML's SP slashed exactly 80% within 3 month.

Currently the SP is only 1/5 of $1.7.

It's hard for me to work out a fair value for this company, but I believe 200Mt at 1.3% Cu asset could be worth more than $700m, based on the following calculation:

Say long term average production cost is $2/lb,
current Copper price at $3.15/lb
$1.15/lb
30kt/y copper =66 million lb *$1.15 = $76m/y net profits

If copper price back to $3.5/lb you can easily work out $100m profits per year.

Compared with other Copper producers, I believe cost under $2/lb for DML is achievable after the ramp-up process, as some producers' copper grade is less than 1% like IVA. Labour costs for DML should be much lower than most of the copper producers around the world.


"The view of the Discovery Metals Board remains that $1.70 per share undervalues Discovery Metals. Since the Company was first approached by the Bidder, the Company has announced maiden Mineral Resources at NE Mango 2 and Ophion. It has also released its September 2012 Quarterly Activities Report and a Pre-AGM Presentation which detail the Company’s progress, expansion plans and exploration success. We currently expect to provide shareholders with a Target’s Statement around 23 November 2012. This will contain further details and reasoning for the Board’s recommendation that shareholders reject the Bidder’s conditional takeover offer."