charts and where to next?

The reason for this chart is to highlight the fact that, besides for some minor selling, most shareholders have held.

Look at the recent low volumes for the last two weeks.

So where to next?

The market is a beast of its own and I do not confess to understand its movements. However, I can use current commodity prices to value the company now, understanding that commodity prices can collapse and my figures can easily become irrelevant (if not already).

Firstly, if we take the base NPV and the expected number of shares to be 565.6 million shares, then it is worth 19 cents. (Don't believe me? Do the sums for yourself.)

Check out the PFS from CSD's website.
http://www.csdtin.com.au/asx-releases/

Now, assuming that the CAPEX is $76 million, then depending on what price you think that they could raise that type of capital (noting that CSD doesn't have a take-off arrangement nor any debt), the amount of shares will vary.

At 7 cents (the same price SPM is prepared to pay for options) and with total equity dilution, that is another 1086 million shares, it makes it 11.3 cents fully diluted, based solely on NPV (net present value).

I believe this is worst case scenario. I also believe that the value of this company will be worth the most once it records its first positive cash-flows (excluding the near-future copper cash-flows).

If we use the expected earnings per share (EPS) and a very conservative price-earnings ratio of 10, we can establish a share price.

Given 565.5 million shares, the EPS is 5.2, making it 52 cents per share (using the PFS values and a tax rate of 30 cents). Even fully diluted using the similar equity raising as above, the EPS is approximately 2.2 cents, making it 22 cents per share.

Once again, this is worst case scenario. There is a lot of things that can go wrong still, yet the upside is significant.

The following are things that will reduce the amount of raising and increase the potential returns to shareholders.

1. Capex significantly reduced (by using overseas kiln).
2. Tin price. (It is set to rise on consensus to US$26k/t).
3. Opex reduction (with definitive drilling).
4. Off-take arrangement to allow loaning money.
5. Copper production cash-flow.
6. Production efficiencies.

One thing people often misunderstand about CSD's NPV is that, unlike the PFS that KAS and SRZ have produced, CSD use a base price of $24k/t in Aussie dollars.

Last night's close was approximately $24.5 k/t (the previous night's close was over $25k/t).

In US dollars, CSD's base NPV value is derived from a price of US$21,840 (using current of exchange rate of 0.91). Now compare that to the other tin projects.

You may ask why CSD can produce tin so cheap. It's all about the by-products and the near surface ore bodies.

Finally, since I've given what I consider to be worst case scenario, I'll now give the other side of the coin. Using the consensus target of US$26k, a 50% equity raising (which is still very conservative in my view), the current exchange rate, and a PE of 15, then I get a value between 76 and 89 cents. Fully funded via debt, I get $1.52.

Anyway, my numbers are out there. It would be interesting to see what numbers other people come up with.

In summary, at worst case scenario it's worth 11.3 cents, where, at what I think is achievable, it could be worth $1.52. (I'm aiming for the 76 cents.)

Of course, only time will tell but it is closing in. 2014 is only a month away, and like someone said earlier, the smart money will move in before it reaches value.

;-)

PS - I'm happy to send a spreadsheet containing all numbers/variables to any of the long-term posters. I've also collated the KZL/SPM resources. It is a work in progress and you need to check figures for yourselves, but it can be used as a guide.