if IO price is Long Term $100, AUD parity, costs say $50/tonne incl royalties etc, IO production of 30mill tonnes, Issued capital of say 1.2 billion shares (currently theres circa 900mill from memory)
Whats gonna be the cash flow per share or EPS??
Margin is $100 IO price -$50 cost= $50/tonne
$50/tonne * 30m tonnes production = 1.5bill cash flow pre tax
MMRT avg say 30% (we can use CAPEX as deduction so who knows, in the growth phase years we prob pay less tax?), so we get profit $1bill post tax
Divide $1bill by a share capital of 1.2 bill = $0.833
PE 10 = $8.30, all pretty much internally funbded + Ive assumed an extra 200-300mill shares added to capital base for growth CAPEX.
So youve got $8.30 a share based on IO price $100 and 50/tonne avg costs
AGO Price at posting:
$2.88 Sentiment: LT Buy Disclosure: Held
