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$3.86 western areas limited

Thanks for straightening that out. Getting ahead of myself...

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majushal

113 Posts.

17

20/08/19

23:42

Post #: 40065925
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Originally posted by entropylord: ↑

Majushal,

WSA doesn’t get the full LME price for it’s concentrate, the smelter gets something for taking that from 15% to 100% (and perhaps for some losses in the process). WSA currently looks like it gets about 72%. Then if I recall correct royalties are about 2%, so lets say 70% of the increase in the pon goes to the EBIT line.

Then the additional EBIT will get fully taxed, at 30%, so actually about 49% of the increased nickel price will go to the NPAT line.

Having said that it did sound from listening to todays call that they are likely to improve payability a few percentage points with the new offtakes.

EL

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Thanks for straightening that out. Getting ahead of myself there, yes straight to the EBIT.

Taking these numbers into account provides an NPAT around $70m or 25cps or forward pe of around 10. Plenty of variable affecting those predictions but still indicates WSA is undervalued given current prices and the potential for the prices to remain high in the short to medium term.

WSA Price at posting: $2.49 Sentiment: Buy Disclosure: Held
5 Upvote

0 Great analysis

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