Dividends are A$ 100 million (US$ 78m) after allowing for loan repayments in first year of full operation and cumulative dividends for the first ten years of full operation are A$ 2257 million(US$ 1761m).
At a discount rate of 8% the NPV after tax in Year 1 for Australasian Resources’ share of the project is A$ 2683 million (US$ 2093m). If the NPV after tax is calculated at Year 5, this increases to A$ 3541 million (US$ 2762m).
It is assumed that Australasian Resources will have on issue 490 million shares following full project funding on a fully diluted basis. In principle the value of a share is the discounted value (NPV) of the future stream of dividends that it will earn. On this basis the value of the share would be A$ 5.47 (US$ 4.27) per share at the start of the project, rising to A$ 8.71 (US$ 6.80) per share in Year 10.
An alternative valuation of shares is to consider the price/earnings ratio for companies of the same type and to multiply that ratio by the earnings of the company after tax. Leading financial analysts were expecting a price-earnings ratio for major mining companies of 12.0 over the period to 20084. Using that method of valuation, and recognising that the value of ARH’s shares is effectively 50% of the value of the joint venture’s net profits after tax, the table shows that the share price in Year 10 would be A$ 7.03 (US$ 5.48)
- Forums
- ASX - By Stock
- ARH
- from king report
from king report
-
- There are more pages in this discussion • 4 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add ARH (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
I88
INFINI RESOURCES LIMITED
Charles Armstrong, CEO & Managing Director
Charles Armstrong
CEO & Managing Director
SPONSORED BY The Market Online