[This is for Avz - reply doesn't work!]I'm trying to start with...

[This is for Avz - reply doesn't work!]

I'm trying to start with a simple "PRC" model (Profit = Revenue - Cost) and then apply a typical PE multiple to obtain a Market Cap and share price. Emphasis is on "simple".

But of course the actual share price on a given day is influenced by many other factors (starting with yours at the top):

• Approaching end of asset life
• Commodity pricing (spot market) and outlook
• Growth opportunities (resource expansion, capacity increase, downstream processing)
• Market sentiment, peer valuation
• M&A activity and opportunities (acquirer or acquiree)
• Balance sheet strength
• Dividends and buybacks
• Share registry, institutional holdings
• ... and loads more

Of course the NPV approach this explicitly takes into account the life of the asset. Here's a quick NPV calculation (at 8%) using the same assumptions as before (including the incorrect 1.7bn SOI):



The share price of $2.58 represents a valuation of the asset now (note: this is the value of Finniss only - not all of CXO), based on future cash flows. Once profits start to flow, a PE ratio is a better way to estimate a fair SP.

Again, arrows fired at this model are most welcome. I'm not a financial analyst, as many could tell

Figaro