Ann: Hancock to earn in to the Mt Bevan project, page-20

Lets do some maths on this one. I’ll assume that this ends up similar to FMG’s Magnetite project Iron Bridge. It is going to pump out 22Mtpa at 67%. Their cash cost is $US35/t but we will use their all in cost of $US50/dmt. Assuming todays 62% price plus a $20 65%+ premium we get $US112/t, giving cashflow of $US1.3B per annum.

Now by the end of the Hancock earn in HAW will still have 20%. That represents $US260M per annum. At a 7% yield that would give them a market cap of $US3.7B. Assuming that they finance their share with a mix of equity and finance then as a worst case we might get 100% dilution, which drops the value for today’s shareholders to $US1.85B or $AU2.4B. At a market cap of $32m that represents a 7500% gain from today’s share price. If I’m off by 100% it’s still a 37 bagger. If I'm off by 500% (and I'm not) then its still a 15 bagger!

LCY might have a bigger share of the project but if you look at their market cap you actually get much more exposure via HAW.

Get in before the institutions do.