G'day Bigstar, it is difficult to say what SDL is worth, and are you talking about share price, or overall company value, because these are two seperate things.
I have provided below, two very rough examples that might give you something to think about.
Assuming that SDL will prove up 500MT of High Grade (Although they are targeting over 300MT, I am anticipating at leas 500MT, but they have the potential for a lot more), you can do a breif comparison with FMG.
If FMG has 5 Billion Tonnes of high grade ore and has a market cap of $14,744,000,000. Then SDL with 500 Million Tonnes, 10% of what FMG has, then SDL's market cap could be seen as being $1,474,400,000, which would put the share price a about 50c. This is however based on FMG's shareprice representing the true value of the company.
Next thing to have a look at, is, and again, assuming they have at least 500MT, the following.
FOB = $62.20/t x 500MT = $31,100,000,000
So if you valued SDL's high grade ore it would amount to about $31,100,000,000.
Of this $31B, you need to take into acount the production margin which is.
Production Margin = $19.65/t x 500MT = $9,825,000
This leave you with about $21,275,000,000, which you need to subtract the $3.3b CAPEX, which brings it down to about $18,000,000,000 Profit over the period whereby they mine the 500MT.
With that said however, you may find they SDL could have anywhere upwards from 1 Billion MT Plus, considering all the land they hold.
Although there are no doubt plenty of holes in my analysis, it should give you something to think about.
SDL Price at posting:
13.5¢ Sentiment: None Disclosure: Held
