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clock Created with Sketch. 16/06/14
13:18
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Originally posted by journeyman
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You're quite right, I had overlooked the fact that the forecasted $300-odd million net cash flow was cashflow and of course wouldn't include depreciation. Lucky I knocked it back to $200m for tax and dep'n then I guess! Please realise that I just 'picked a figure' here... my calculations are very rough and are along the lines of... $300m net profit, less any depreciation/amortisation results in taxable profit of whatever (let's say $250m?? this could be way off target), less tax leaves $175m profit (or increase to net assets). As you would know, the basis for paying out dividends can be whatever the company decides, so long as it is within net asset/solvency rules. Most companies choose to payout a percentage of profits, so I took the liberty of assuming that they would pay dividends out on this basis. Not sure whether cashflow forecasts included finance costs? Maybe not as it wouldn't have been known how the project would be financed at that point? Either way, the prior announcements probably disclose it.
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When the mining company is still an exploration and not a producing company, the exploration expense would normally be capitalized. Amortization would start when production commences generating income. I would assume the rate of amortization would coincide with the estimated LOM
