@JSB007, Here's the rationale
Without further expansion core intends to produce 1,206.6kt of Spod. While the start and end years make this 8 years of mining, for modelling using 7 years is easier (7 * 172 = 1,204). The revenues and costs were quoted in USD, but for simplicity I'm going to assume USD and tax offset and that every year is identical (there not). In addition to the start-up capex there is sustaining capex of $123m is spread over multiple years. In the simplied calculation below I'm assuming this is one lump at a discount factor of 0.65. The DFS revenue assumption was $743/t, and cash costs of $364/t. Start-up capex is $89m.
The current price looks to now be above US$2,500 not US$743. Inclusive of caps/discounts and sales at Spot rates, if Core was to average US$2,500 then this simple formula becomes: PV(0.08,7,-172*(2500-364)/1000,,0)-89-123*.65 = $1,744m
So with a market cap of $1.3b core has improved to only a 75% of a guessed NPV using US$2500/t for Spod. As the share price is below a revised NPV calculation, the market is essentially assuming Spod prices will fall and not stay at current levels (or is expecting a return well above 8% for the risk being taken on &/or assuming something will prevent proven processes with experienced operators from occurring). At the movement everything is pointing towards continued increases beyond circa US$2500/t
It also means that if Spod prices stay at their current prices (they don't even need to increase), the current share price is attributing attributing zero value to expanding the mine life, zero value to fines, zero value to gold, zero value to uranium/silver etc, zero value to Anningie/Barrow Creak, zero value to further high-purity processing and zero value to possibly increasing production beyond circa 190ktpa (the year 2-5 ave). The 8% discount factor in the present value calculation above means even if priced at this revised NPV, an 8% pa return would still be generated.
Overall I think the rationale for higher pricing for CXO shares is very strong which is why it remains my largest holding.
(20min delay)