OK punters, I have done a few rough calcs witht he new JORC to work out what sort of divvies we may get if CDU decide to pay out all profits as dividends, as, to be honest, I thought calls of $2/share have been a bit rich....I was surprised at the results.
Assumptions: - 3 Mtpa - Grade - 30 Mt at 1.7% Cu Equiv. - Average recovery of Cu Equiv - 80% to allow for lower likley net recovery and payment of Co and Au - Cu price - US$4/lb (current price) - average tax rate - 20% (allows for depreciation etc)
- Debt - assumed ZERO....this is the BIGGIE! If things go to plan, we will have zero debt or close to it, with minimum dilution. This is the elephant in the room.....as it allows immediate dividends. We may need to raise a bit more, but I assume this will be possible at reasonable dilution (say $4/share).
Using the above, you get a constant $1 to $1.30 divident for 10 years. Pretty good!
HOWEVER, it gets better. For certain we will be minining higher grade in the intial years. Even without allowing for the possible nugget effect (which may or may not be real), I have just split up the 30 Mt at 1.7% Cu equiv to start at 2.5% Cu, then 2% Cu, then 1.5% Cu, and the last 4 years at 1% Cu equiv. Overall, same weighted average of 30Mt at 1.7% Cu equiv.
NOW.....we get $2 divvy for the first 3 years, and $1.50/share for the next few......that will do me thank you very much. And that is without ANY upside in the current JORC of 30Mt at 1.7% cu equiv.
I am quite surprised, I must say. Not having a huge debt to pay off is something a lot of people have missed I think.....this is a big deal, and thanks to Waynes persistance.
Back of the fag packet calcs, yes, and the DFS will be interesting, but all of a sudden I have become more bullish.
Regards
Process
CDU Price at posting:
$3.15 Sentiment: Buy Disclosure: Held
