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06/05/09
22:54
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Bargain Days?
The following analysis has been lifted in total from a post in Stockhouse - the Canadian version of HotCopper.
Lots of positive posts there!
Assume the item is predicated on SXEW plant operating.
The SXEW plant requires finance and completion - "$200 million please Sir!"
Remember the following item quotes Canadian Currency ------------>
"Once they run Kinsevere at full capacity of 60,000tpa at a cash cost of $0.88lb that makes me think:
60,000 tonnes of CU = 132,277,357 lb of CU * $1.12lb (say copper $2 - 0.88/lb cash cost = $1.12 operating profit / lb) = roughly $150mil free cash flow annually with copper price of $2.
Or $1.5 EPS annually.
Not bad!
Think AVM will be 100mil OS after dilution producing over 132mil cu annually.
Compare that to Capstone over 165mil OS and $2 SP AVM at $1.30 is CHEAP !
In fact, AVM with Kinsevere will be probably one of the cheapest copper producers in the world.
If the copper prices recover to $3 I believe AVM will be back well above $15 again"
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