Lighten up Buddy everyone tries to to predict future earnings to work out expected returns of their investment, I will do what works for me and you do whatever you do. Use current capital expenditure if you wish it makes little difference to me. Your a farmer right? Is it wheat? Do you just work the paddocks ploughing, seeding, spraying without knowing how many bags an acre you need to break even at harvest time?
Well I'm just working backwards and need this company to at least do better than interest in the bank. 15% return per year, 10% return on my capital per year over 10 years after tax and I don't care if the share price is 5 cents then plus 5% before tax for profit will match the banks anything over that I'll be very happy. So do you see that as being realistic or a baseless ramp?
So without going into the nitty gritty with exact figures the company needs to return $50 million per year to shareholders at todays price or around $80 million before tax. Lets use the projected copper tonnage of 30 000 tonne @ $7500 AUD for revenue of $225 million per year. $80 million is 35.5% of that, current copper price is $3.42 AUD per pound meaning they can have total costs of $2.20 per pound over 10 years to achieve this. I don't find this unreasonable if you invested today but obviously returns each of us expect changes the bottom line and even if the JORC is out by 5% in favour of Cudeco would change things again. Accounting is far from my strength so if Janti or Malgmac want to set me straight on a few things I'm all ears.
CDU Price at posting:
$1.44 Sentiment: Buy Disclosure: Held
