Average prices received in 1819 were AUD$7.84 per pound of concentrate, current price is over AUD$10 per pound. Assuming the higher prices continue, the higher price should flow straight to the bottom line.
So using $10 as the new average price, $2.26 x 2200 = increase in the price per tonne of $5000 x 21000 tonnes = $105m increase in revenue and straight to npat as well.
So given current profit of $14m assuming prices remain around current levels, next year's NPAT could be around $120m. Forecast EPS would increase from 5.26cps to around 44cps. Which means price is currently trading around a forward PE of <6. IGOs forward PE is 24 although it has gold as well. Some WSA production is also hedged so may not receive the full benefit of the price increase.
Happy to be corrected, but my back of the envelope calculations point to a realistic chance of the share price doubling over the next year. Hard not to argue that the current price undervalues WSA. Expect the $2.50 share price resistance wall to break.
My 2c worth
WSA Price at posting:
$2.49 Sentiment: Buy Disclosure: Held
