Your fundamental analysis is wrong, given they earned revenues of 21m USD (1.9 cps) from the iron ore this year - when they encountered Besalco issues, Santa Fe issues etc etc and next year with - Potential to move 100% ownership of Vallenar, unless they receive 40.6m USD (from the annual report - worth AUD4.4 cps by itself) - Look to ramp up to 1million tonnes of Iron Ore (revenues of around USD 85m - about AUD 10cps) - and hopefully get the Lithium Plant/Sodium Sulphate/Potash up and running, although cash flows not expected until 2010.
The ASX have relisted them because an independant auditor has signed off on their solvency.
I am not sure what your discount is and it clearly isn't past 1 year but I suggest you go and do your analysis again....
some things that might help, a quote from the translated version of the Vallenar report on their future projections.
" Fernando Pau, Executive Vice President of the mine, explained that in the short term, the production of concentrated iron Vallenar Iron Company aims for 1 million tons per annum while that in the medium term, to 3 million tons. It also said that, if continued demand and achieve the financial and commercial agreements today initiated, it is estimated that they could achieve a production of concentrated iron to 5 million tons a year in the long term. Which would mean that investments could reach $ 700 million.
This is dated the 25th Sept - and I think the key point is the "financial and commercial agreements today initiated"... ie Mike Clarke is getting this show on the road. If you don't like Phil Thomas (fine) but Mike Clarke runs Vallenar and is driving this towards bigger and better things...
The next couple of months will be tough, sure, but this company has extraordinary growth potential.
ADY Price at posting:
5.3¢ Sentiment: LT Buy Disclosure: Held
