The following model assumes (as you would) that their very rare...

The following model assumes (as you would) that their very rare high grade zone is mined first. This covers the first 6 years and pays back all project debt.

I've used a long term Mo price of $US20lb rather than the current price of $US34lb.

This is basically looking at the project in year 2 (after 1 years ramp up). It allows for a very generous capex of $US750M (more than enough) and debt repayment of $100M p.a. plus interest.

The cash suplus is $A393 Million p.a. for the project.

RCHs share is 71.25% of 50% (50% owned by a JV partner) or
$A115M p.a.

Assuming RCH has to say raise another $10M on top of option conversions, the market cap fully dilued would be about $110M.

So with a 50% JV (typically would be with a steel mill) RCH shareholders will earn a pre tax cash surplus of $115M on a market cap of $110M.

Clearly, the share price of RCH will grow many multiples over the next 3 - 4 years. The current share price is simply dirt cheap.

How they fund the equity component will be the trick. A JV the obvious route just like Moly Metals Ltd (MOL) which is belatedly trying to entice a steel company.

Now this model is based on a published feasibility study completed by a international engineering consultancy for a Canadian project.

Based on a 9 Million tonne p.a. Mill Capacity

Total Material Mined 22,000,000 tonnes
Milled 9,000,000
Stock Pile 1,000,000
Waste 12,000,000

Total Production Costs In $US100,000,000 per annum

Cost/t/mined $US4.54
Cost/t Milled $US11.11


Milled 9,000,000 tonnes
Grade 0.19% Mo (high grade core)
Contained 17,237 tonnes of MoS2
Recovery 87%
Recovered 14,996
Loss in Roaster 1.50%
Metal Available For Sale 14,771 tonnes
=15,280,423 kg
=33,616,931 lb
$US $672,338,621
Deduct 2% marketing -$13,446,772
Deduct Transport @ $US150 t = -$2,292,063
Roasting Charge @ 1.98 kg = -$30,255,238

Net Revenue $US $626,344,547 PER ANNUM

Less Production Costs -$100,000,000 p.a.
Less Sustaining Capex -$5,000,000 p.a.
Less Interest -$50,000,000 p.a.
Less Deprection of plant (10 yrs) -$75,000,000
Less Head Office -$10,000,000

Net Profit Befor Tax $US386,344,547

Add Back Depn $75,000,000
Add Back Interest $50,000,000

EBITDA $US511,344,547

Less Interest -$50,000,000
less Debt Pmt -$100,000,000

Cash Surplus $US361,344,547 PER ANNUM (years 2- 7)

= $A393 Million per annum

RCH's share is