A great post by a UK poster.Fri 09:54 Re: Entry point drunken...

A great post by a UK poster.

Fri 09:54 Re: Entry point drunken sailor 2





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It means that some of the 10m options that were granted at the AGM have been exercised. The exercise price is 10c so some directors have paid 10c for shares that are currently trading at 14c, no problems that is the point of options. They have also issued some more options.

I did a back of a fag packet calculation on what post tax profit per share might be for 2011, based on data that was published back in 2008 before the shut down. I basically assumed that 2011 mine performance would be as per 2009 predicted performance before the shut down - given that the company has not given us much to go on, I still feel that this is a reasonable assumption from the figures they have given. I adjusted the mine performance figures for the main changes that have occured since ie Ni @ $10/Lb and A$=US$, there are other changes in the price of the metals that would contribute to by-product credits that I could not factor in. On a fully diluted basis, ie all options exercised and all loan notes converted (would roughly double the number of shares in issue at the moment), I came up with EPS of 8c.

If all this were to happen ie the performance and the dilution and the market were to value the shares on a p/e of 10 then 80c is a fair value. If dilution does not happen then it is A$1.6. If dilution happens and Ni price drops or mine performance is worse than expected / my assumptions are out by a long way, then maybe 40c is fair. It would really help if the company where to give us a lot more to go on to save people like me guessing based on potentially flawed assumptions. However I need to have gotten things very very wrong for this not to be a multi bagger at current price DYOR