Regardless of Dividend yield i bought in due to the pellet price...

Regardless of Dividend yield i bought in due to the pellet price and production rates.

Have just reapplied my initial working and assumed a 40% decrease in margins due to the unknowns of any mining company in production.

Although i do not think the pellet price will decrease given the current global carbon reduction push, no one has a crystal ball so i always like to consider worst case scenarios.

The below are my workings taking in to account the current pellet price.

The below is not advice and should not be used to make any investment decision i am not a licensed adviser and am not a professional just a shareholder who is bullish on the prospects of this company. The below numbers are my back of envelop calculations and could be incorrect so always do your own research and do not rely on Hotcopper posts for advice.

I find it interesting that using a PE of 5 and a worst case 40% reduction in current margins for whatever reason still given me $1.70.. The life of mine is more than 10 years so it could be argued that there is still value at this price.. This will a long term play for me regardless of any dividends. I do find it interesting that the company has continued to pay franked dividends and think it is rather obvious that this will continue and potentially increase. Also very good to see a director step up and drop quarter of a million in the stock last week at this highest price it had traded at in years.

	ASX GRR
1	Shares on Issue	1,157,338,698.00
2	Cash / Receivables at 31/3	$332,020,000.00
3	Cash / Receivablesvalue per share	0.286882311
4	Debt	0
5	Current Net Position	$332,020,000.00
6	Share Price	0.75
7	Market Cap	868,004,023.50
8	Assumed production costs (AUD)	$120.00
9	Life of Mine/Production asset (years)	10
10	Pellet price AUD	$420.00
11	Earnings per tonne	$300.00
12	Likely annual production rates	2,000,000.00
13	Assumed EBIT	$600,000,000.00
14	Tax of 30%	$180,000,000.00
15	Earnings after 30% tax reduction	$420,000,000.00
16	Earnings per share	0.36
17	Assumed PE ratio of 5	$1.81
18	Assumed PE ratio of 5 + cash at 31/3	$2.10
19	Assumed PE ratio of 10 (life or project) + cash	$3.92
20	40% discounton PE of 5 + cash (Iron ore price, production cost uncertainty etc)	$1.70
21
22	20% discount on PE of 5 + cash (Iron ore price, production cost uncertainty etc)	$1.90
23
24	10% discount on PE of 5 + cash (Iron ore price, production cost uncertainty etc)	$2.00

All my opinion only and as i keep saying do your own research and check all figures yourself as the above is just my back of envelope workings and could be wrong.

Good luck all.