aar forecast net profit 30 june 2008

Well Guys,

I think HC is a forum for all of us to share information and opinion on SHARES not any one particular poster, doing so we will deviate from its original purpose.

I would welcome any comments from readers on the following quick research on ballpark figures I did today. Im trying to figure out what the net profit at end of FY 08 ( 30 June 2008), although the fact will be released to ASX in about 3 weeks time. My assumption and calculation might be wrong, but at least this is the starting point.


Facts
30 june 2007

gold sales 10,119,114.00
cost of product 3,554,822.00 35%
other expenses 1,153,069.00 11%
net profit 5,411,223.00 54%


Forecast
30 june 2008
ore inventory **
50,000 tonnes
equivalent 18,809.19 ounces of gold *

gold sales @900 16,928,266.72
cost of prod'n 5,924,893.35 35%
other expenses 1,862,109.34 11%
net profit 9,141,264.03 54%

* "The profit came from gold production of 12,434 ounces from 33,053 tonnes of ore processed" quoted from Sept QTR 2007 report p 3. "

** From annual report p2.

Assumption :

1. All ore stock pile from the beginning of financial year 50,000tonnes will be processed and sold.
2. Same conversion grade
3. Same production cost per ounces
4. no material changes in other expenses
5. gold price $900/oz

If my ballpark fig is right, AAR is very vey undervalued at the moment,

1. cash on hand as of 30 Mar 08 $8,163 M,

2. with burning rate $260K / QTR, we expect cash on hand at 30 June 08 will be around $7.9M plus any net profit for the QTR.

3. THIS IS JUST BASED ON WEST MANDILLA FIGURE ONLY!

4. EAST MANDILLA'S 34,870 OZ OF GOLD IS YET TO BE ADDED !!

WAIT UNTIL THE SELL OFF SUBSIDE, THE TRUE VALUE OF AAR WILL EVENTUALLY RECOGNISED.

DYOR