blr - valuation , page-2

Grant64t,

It's always good to see somebody else labouring over the same things I sweat over ;)

A couple of things (thought that as you have the spreadsheet handy) would make it easy to change.

For those that want to know where I am coming from..

PE = Mvalue per share/EPS

&

EPS=(NET Income -Divi for pref stock )/Ave no of shares

(I assume nil pref stock)

To get a more accurate Net income (before tax), can you factor in an interest cost on the say $80m facility that will be required as this will reduce taxable income & tax payable...

Also I know you've used industry average for your PE (is that U industry or U miners?), but I think you may have dudded your self there. It seems when you become a U miner your PE increases (significantly) as opposed to being an explorer or resource just inground.

For example Cameco is currently on a PE of 17.44 & ERA trades at a PE of 22.53 to name two...Most of the others on my U watch screen are negative or very low (as still trying to take that step).

To be conservative a 12 to 15 PE (I feel) would be more reflective of the value that would be inherent in a U producer at that point. (Personally I think PE would be higher but good to prune it back for added buffer).

Would be good to see where the number come in at.

My estimate

Income $60m less $8m - interest (ie $80m at 10%)= $52M less production cost of $28m = $24M

$24M income less tax at 39% ($9.36M) = after tax $14.64M

$14.64M/ 840,934,800(Shares) = .0174c per share

.0174 * 12 = 20.88c
.0174 * 15 = 26.10c

Surprisingly slightly higher but still in the same ball park after allowing for the 1 large item of interest charge.

I realise no depreciation included & other add backs like ablation licencing (if we could be so lucky).

Would still like to see the spread sheet if you got the time.

Thanks

M