1.35, page-2

Southern Cross Equities gave a speculative buy at $1.50 and look like FRS might touch it any time now. I still believe $1.50 is conservative after scanning through the company iron ore projects. Given that Iron ore negotiations are ongoing and majority of experts expecting prices to increase 30-50%, below is my calculation:

FRS (fully diluted) = 127mln@$1.28 = $162mln
Capital cost = $60-$90mln

3 mtpa scenario:
Sales: $80/t
Cost of production: $45/t
Margin: $35/t
EBITDA: 3@$35 = $105mln

5mtpa Scenario:
5@$35=$175mln

Assuming EV at 5X of EBITDA:
FRS's Market cap = $500mln-$1bln

This give me a target of: $3-$6.