I calculate a fully diluted valuation based on the Ding deal...

I calculate a fully diluted valuation based on the Ding deal alone of AUD 0.86 per share, based on:

(AUD 350m value of project + AUD 69.379m cash from exercise of outstanding options - AUD 10m finders fee) / 476m fully diluted shares

Even just valuing the cash from the Ding deal alone (and not valuing the remaining 30% stake in the project) would give AUD 0.67 per fully-diluted share, based on:

(AUD 250m cash part of deal + AUD 69.379m cash from exercise of outstanding options) / 476m fully diluted shares

A more accurate valuation would also include the company's other iron ore projects, which Cape Lambert intends to spin out into a new ASX-listed entity. Assuming these are worth AUD 20m (prudently low, but could be much more) to Cape Lambert, I calculate a fully diluted valuation based on the deal alone of AUD 0.90 per share, based on:

(AUD 350m value of project + AUD 69.379m cash from exercise of outstanding options - AUD 10m finders fee + AUD 20m value of other projects to be hived-off) / 476m fully diluted shares

By spending 68 cents per share now, you are effectively buying 67 cents of Ding's cash + a share in 30% of the huge iron ore project + a share in the new ASX-listed entity. So, the current share price continues to be stupidly cheap!

According to the news release on 26 March 2007, "This agreement is conditional on Cape Lambert providing the purchasers with an independent geological report confirming an indicated JORC compliant resource of 300 million tonnes. The Directors expect the report to be completed in Q2, 2007."

According to the news release on 18 May 2007, "Certification of the resource estimate
is expected to be completed by the end of July". So, final confirmation of the deal is expected to be in July.

As we move towards the resource being confirmed to be at least 300m tonnes, the share price will move towards AUD 0.90 and then beyond.

Does anyone disagree with my valuations? If so, can you provide your own valuations with supported reasons?

No advice intended, all IMHO and please DYOR,
Prawn Pond