fabulous takeover target...

I have been doing some calculations I have no doubt some xstrata execs should have done already...

Please disagree with my calculations if you think I have done something fundamentally incorrect here... I would like your opinion too.

Based on the following statements:

From Tony Robbins, MD:

Tampakan is a very large resource, needing a major mining company to develop it. It
has two billion tonnes in resources containing 11.6 million tonnes of copper and 14.6
million ounces of gold, and we expect that will increase. Based on the Indophil prefeasibility
study, it could mill around 30 million tonnes per annum of ore and the
mining costs are expected to be less than US$0.70 per pound, excluding the expected
credits for molybdenum. So there’s a real opportunity to push those mining costs
down so they’ll be at the bottom of the second quartile – touching the bottom quartile
– of the world copper cash cost curve.

Also:

ASX Announcement - TAMPAKAN PROJECT RIGHTS UPHELD BY
PHILIPPINE SUPREME COURT DECISION

Indophil Resources NL (Indophil) is pleased to advise that the Philippine Supreme Court has
reaffirmed the rights of Indophil’s operating associate Sagittarius Mines Inc. (SMI) to the Columbio
Financial or Technical Assistance Agreement (FTAA) following the dismissal of the last outstanding
petition brought by Lepanto Consolidated Mining Inc challenging the 2001 transfer of the
Tampakan Project interest to SMI.
Prior court decisions of 2004 and 2005 had declared “with finality” that the FTAA is valid and
constitutional. Prior to these decisions, Lepanto had made a separate Administrative appeal to the
Supreme Court to have the Court of Appeals reconsider the transfer, and this last course of action
has now been dismissed.
Tony Robbins, Managing Director of Indophil commented: ”The latest decision of the Supreme
Court is a pleasing outcome which reconfirms that Indophil and its Philippine partners are free to
continue to advance the Tampakan Copper-Gold Project. Indophil has now resolved favourably
every legal hurdle to ownership of the title to the Tampakan Copper-Gold Project.”
Mr Robbins added that Indophil was consistently advised by its Philippine legal counsel that it
would be successful in its defence of the series of legal actions. He particularly wished to express
his thanks for the support of Indophil’s Philippine partners, the Alcantara Group of Companies and
the Tampakan Group of Companies, over the years on this matter.
Indophil recently completed a A$27 million pre-feasibility study on the Tampakan Copper-Gold
Project, confirming its position as one of the world’s outstanding new large-scale copper-gold
deposits. If the Tampakan deposit was in production now, it would rank among the top 20 copper
producers in the world.
Based on a 30Mtpa milling rate, the Tampakan deposit is expected to produce an average of
210,000 tonnes of copper and 218,000 ounces of gold per annum in its first 10 years of operation.
For further information please contact:
Gavan Collery
Manager Corporate Affairs
Indophil Resources NL
Ph: +61 419 372 210

OK; lets keep it simple; lets look at the copper alone first of all.

210 000 tonnes of copper per annum..

Currently $3.60 (US) per pound.

OK. this price may or may not hold up in the long term. Lets look at perhaps at a more realistic price of $3.00 in the longer term.

It costs 70c to mine the stuff.

Ok, so the miners get a profit of $2.30 US per pound of copper.

So 210 000 tonnes copper = $1.064 Billion per annum US

Now IRN gets 34% of this (unless there is something more behind the deal with xstrata) = A$ 450 million per year.

Remember this is not including 34% of the gold (280 000 ounces/year) and molybdenum credits.

Now look at IRN's market capitalisation. Roughly $350 million. Now take away the $100 million in cash they have. Look at the enterprise value of the company....

So here we have a company which will receive much more in cash from xstrata than they are actually capitalized at every year... a P/E of <1 at current share prices...

If I were a xstrata exec (or BHP or RIO)... I would be advising to silently accumulate shares in this one... and then takeover!

This is my opinion only....

DYOR.....