re: Ann: RUM: Acquisition of Minority JV Inte... LukeodUsing a...

re: Ann: RUM: Acquisition of Minority JV Inte... Lukeod
Using a discounted cash flow model I get the following share prices. It assumes the following assumptions are fixed.

Assumptions:
1. Discount Rate is 10%
2. Number of Shares are 120,000,000
3. Cash Flow per Ton or profit is $120 per ton
4. Production begins in 2017
5. All potash produced is sold

So, based on the annual production rates below, the corresponding share price would be

Annual Production = Share Price Today
400,000t = $0.82
800,000t = $1.64
1,200,000t = $2.47
1,600,000t = $3.29
2,000,000t = $4.11
2,400,000t = $4.93
2,800,000t = $5.75
3,200,000t = $6.58
3,600,000t = $7.40
4,000,000t = $8.22
4,400,000t = $9.04
4,800,000t = $9.87
5,200,000t = $10.69
5,600,000t = $11.51

So RWD would need to announce that production would begin in 2017, with a production rate of around 5.6 million tons, and a profit of $120 per ton to get to approximately $11.1

Using the same model, if I change production to commence in 2018 then the current share price calculates to $0.52, assuming 400,000 tons mined per annum.