Nice annual report with no surprises and nothing new. The company comes across as being efficient and well managed, with reasonable management costs. The acquision of the freehold at Kempfield is a nice touch.
Assuming the figures for the scoping study are correct, then to speculate, operating cash flow might be increased to say 387 million using a silver price of A$35 per ounce (undiscounted). Provision for capex, and mine closure, say 110 million and 50 million shares, provision for tax at 30% say $83 million leaves 194 million of shareholders funds or just over $1 per share. Not sure if royalties are factored into operating costs, if not then they will need to be added to the above figures. A higher silver price may change cut off grade, and this so this could impact positively on cash flow. I look forward to the DFS due in early 2012.
Of course the above paragraph is entirely speculative and the figures might be entirely wrong; the silver price might collapse; the Greens might win government and close down all mining operations or Labour might ban all energy production that generates CO2. Even if the figures are right they will take several years to come to fruition. For me though, buying shares in ARD may generate a far better return than buying property for the same period and having the pleasure of paying profits as stamp duty.
None of this is investment advice, figures that are not quoted facts in the ARD annual report are pure speculation. Please do your own research.
ARD Price at posting:
23.0¢ Sentiment: None Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)