hartleys valuation 11 cents/share

Hartleys Limited Specialist Equities Research 14 March 2006
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NUSTAR MINING CORPORATION LIMITED Share Price
NMC $0.071 SPECULATIVE BUY
Theoretical Consolidated Price: $0.85
Key Market Information Management of Intrepid Mines Limited Company Information
Share Price $0.852 Colin Jackson Chairman Level 2, 34 Colin St
Theoretical Consolidated Market Capitalisation $126m Laurence Curtis President & CEO West Perth WA 6005
52 Week High-Low $0.08-$0.05 Brett Lambert Executive Director & COO Tel: +61 8 9346 0000
Issued Capital 147.8m Derek Humphry CFO Fax: +61 8 9346 0001
Issued Capital (fully diluted inc. ITM options) 149.2m Bill McGuinty Vice President Exploration Web:
Options 11.0m@$A0.92
Hedging 147,360oz @ $626.6/oz Expected Major Shareholders of Intrepid Mines Limited %
Yearly Turnover/Volume $50.6m/845.7m shares
Liquidity Measure (Yearly Turnover/Issued Capital) 572% 1 Sedimentary Holdings 11.3
Valuation $1.32 2 Mathews Capital 6.6
3 SG Hiscock 6.0
Financial Performance Unit FY2005A FY2006F FY2007F FY2008F 4 Sprott AM 3.7
5 Richard Palmer 3.7
Net Revenue A$m 3.3 57.3 72.4 108.5 6 Investors Mutual 3.5
Total Costs A$m (5.7) (33.6) (31.5) (48.7) 7 Fidelity 3.3
EBITDA A$m (2.4) 23.7 40.9 59.9 8
Depreciation/Amort A$m - (10.3) (9.5) (14.7) 9
EBIT A$m (2.4) 13.5 31.4 45.1 10
Net Interest A$m (0.3) (3.7) (2.2) (2.0)
Pre-Tax Profit A$m (2.7) 9.8 29.2 43.1 Reserves & Resources Mt g/t Au Koz Attrib.
Tax Expense A$m - (3.9) (8.8) (12.9)
NPAT A$m (2.7) 5.9 20.4 30.2 Paulsens
Abnormal Items A$m - - - - Reserves 1.02 10.70 4 12 412
Reported Profit A$m (2.7) 5.9 20.4 30.2 Resources 1.37 11.76 5 20 520
Kamila
Resources - Gold 2.32 4.44 3 31 331
Financial Position Unit FY2005A FY2006F FY2007F FY2008F Resources - Silver 120.00 8 ,960 8,960
Resources - Gold Equiv 4 80 480
Cash A$m 0.9 13.2 1.3 16.2
Other Current Assets A$m 6.6 8.5 8.9 12.4 Total (Au Equiv) 3.69 8.43 1 ,000 1,000
Total Current Assets A$m 7.5 21.7 10.2 28.6
Property, Plant & Equip. A$m 18.0 18.0 44.7 64.0
Exploration A$m 23.0 21.6 20.3 19.0 Production Summary Unit FY2005A FY2006F FY2007F FY2008F
Investments/other A$m 0.9 0.7 0.7 0.7 *Attributable
Tot Non-Curr. Assets A$m 41.8 40.3 65.7 83.7 Payable Zinc Metal 000t - - - -
Total Assets A$m 49.4 62.0 75.8 112.3 Payable Copper Metal 000t - - - -
Payable Lead Metal 000t - - - -
Short Term Borrowings A$m (5.2) (5.5) - - Payable Silver Metal 000oz - - - 384.4
Other A$m (5.8) (8.7) (12.4) (10.8) Payable Gold Metal 000oz 7.4 81.9 92.5 132.4
Total Curr. Liabilities A$m (11.0) (14.2) (12.4) (10.8) Cash Cost $A/oz 366.0 378.3 291.4 291.7
Long Term Borrowings A$m (25.9) (18.9) (14.0) (17.4)
Other A$m (0.4) (13.4) (13.4) (13.4) Price Assumptions Unit FY2005A FY2006F FY2007F FY2008F
Total Non-Curr. Liabil. A$m (26.3) (32.4) (27.4) (30.8)
Total Liabilities A$m (37.3) (46.6) (39.8) (41.6) Gold US$/oz 424 513 580 573
Exchange Rate A$/US$ 0.75 0.75 0.74 0.73
Net Assets A$m 12.1 15.5 36.0 70.7 $A Gold A$/oz 562 686 783 784
Cashflow Unit FY2005A FY2006F FY2007F FY2008F
Hedging Unit FY2005A FY2006F FY2007F FY2008F
Operating Cashflow A$m 1.4 21.9 44.3 54.8
Income Tax Paid A$m - - (3.7) (4.6) Total Forward Sales - Gold 000oz - 49.5 52.5 46.8
Interest & Other A$m (0.3) (3.1) (2.2) (2.0) Forward Gold Price $A/oz - 626.6 626.6 626.6
Operating Activities A$m 1.1 18.8 38.4 48.2
Sensitivity Analysis Valuation ($/s) NPAT EPS (¢) CFPS (¢)
Property, Plant & Equip. A$m (15.3) (6.7) (31.1) (30.1)
Exploration and Devel. A$m (0.3) (2.8) (3.9) (2.6) Base Case 1.32 5.9 5.1 10.8
Investments A$m - 0.0 - - Exchange Rate +10% 1.18 3.7 3.2 9.3
Investment Activities A$m (15.6) (9.4) (34.9) (32.7) Exchange Rate -10% 1.49 8.5 7.4 12.6
Gold Price +10% 1.45 8.3 7.1 12.4
Repayment of Borrowings A$m - (11.6) (15.5) (5.0) Gold Price -10% 1.19 3.5 3.0 9.2
Equity A$m 31.1 15.3 0.1 4.5 Operating Costs +10% 1.24 4.9 4.3 10.2
Dividends Paid A$m - - - - Operating Costs -10% 1.40 6.8 5.9 11.4
Financing Activities A$m 31.1 2.9 (15.4) (0.5) *N.B. NPAT, EPS, CFPS forecasts are for FY2006
Net Cashflow A$m 16.7 12.3 (11.9) 14.9
Share Price Valuation (NAV) Est. $m Est. $/share
Ratio Analysis Unit FY2005A FY2006F FY2007F FY2008F
Paulsens (NPV @ 5%) 110.4 0.74
Cashflow Per Share A¢ (3.3) 10.8 20.2 29.4 Kamila (NPV @ 8%) 65.7 0.44
Cashflow Multiple X (25.7) 7.9 4.2 2.9 Exploration 60.0 0.40
Earnings Per Share A¢ (3.3) 5.1 13.8 19.8 Cash 1.4 0.01
Price to Earnings Ratio X (25.7) 16.7 6.2 4.3 Forwards (19.2) (0.13)
Dividends Per Share A¢ - - - - Corporate Overheads (10.9) (0.07)
Dividend Yield % - - - - Total Debt (31.7) (0.21)
Net Debt / Equity % 2.5 0.5 0.1 na Tax Losses 0.3 0.00
Interest Cover X 3.7 14.2 22.1 - Options & Other Equity 21.7 0.15
Return on Equity % na 38% 57% 43% Total 197.6 1.32
Analyst: Andrew Muir
Phone: +61 8 9268 3045
Sources: IRESS, Company Information, Hartleys Research
March 2006
Last Updated: 14/03/2006