intersting read from a brokers perspective

Just a quick email to be telling them not to panic with the share
> price
> fall on LIN . I have spoken to the MD who is on site now and everything
> is going very well. The stock was obviously over bought and is now in
> the process of being over sold. I think that with the problems in
> Europe and the US people are selling any stock that there is volume and
> they are in profit in.
>
> The below workings are still in Draft and need to be developed further
> but based on the target that they seem to be on track for by December.
> We have made lots of assumptions to get to these numbers and some may or
> may not be accurate.
>
> The price will do what it wants to do but they have 150 holes still to
> drill.
>
> They are still targeting 2.5m tonnes of copper and 5m ounces of gold.
> It will take time for the market to catch on and obviously another 7
> months of drilling to get a better picture of how close they will get to
> this target but they think they are still very achievable .
> On speaking with Lindian MD Steve he reiterated that he thinks that the
> high grade supergene copper seems to run up the western flank of the
> Island - if that is the case and we can say 1200m x 400m x 80m x 2.4
> (specific gravity of the ore) x 1.1% then we have 1.01m tonnes of copper
> equivalent in the high grade zone from surface. That is twice the
> amount of copper as Cudeco in the high grade zone at similar grades.
> They will also likely have another 1.5m tonnes of the lower grade copper
> equivalent.
>
> The gold looks to be a mind blowing 5m ounces at twice the grade of
> Boddington! Boddington is Australia's biggest gold mine with 20m ounces
> and this is targeting 5m ounces. With copper and silver credits this
> comes out at huge homogenous intersections at 1.26g/t gold equivalent
> perfect for bulk mining. I would expect that contained metal in each
> tonne would be about $70 with costs of production to be about $20.00.
> Even if it is at $30 production costs it is still a huge profit. Just
> imagine millions of tonnes and each one getting a profit of $40 per
> tonne. Boddington has an average grade of 0.59 Grams per tonne (g/t).
>
> Numbers to get to 1.26g/t gold equivalent are below:
>
>
> % or gpt
>
> ounces
>
> US price
>
> Price AUD
>
> Value of Metal in a tonne
>
> copper %
>
> 0.18
>
> $ 8,300.00
>
> $ 8,300.00
>
> $ 14.94
>
> silver G/t
>
> 3.42
>
> 0.120677488
>
> $ 34.00
>
> $ 34.00
>
> $ 1.46
>
> gold G/t
>
> 0.98
>
> 0.034580099
>
> $ 1,637.00
>
> $ 1,637.00
>
> $ 56.61
>
>
>
>
>
>
>
> $ 73.01
>
>
>
>
> 95% Recovery
>
> $ 69.36
>
> Gold Equivalent
>
> 129%
>
> 1.26
>
> g/t
>
>
>
>
> less costs
>
> -$ 20.00
>
> $73.01/$56.61 =
>
>
>
> Profit per Tonne
>
> $ 49.36
>
>
>
>
> My gold numbers are
>
> High grade is 1.26gt but let's just call it 1.1gt average over the
> project.
>
> Potential numbers are
> grade 1.1g/tonne, volume=( 300m length* 300width*433m depth)=
> 38,970,000
> m3 density of rock is 2.4. 2.4 x 38,970,000 m3 = 93,528,000 tonnes of
> ore. 93,528,000 x 1.2g = 112,233,600 grams of contained gold. 1 ounce
> = 28.3495231 grams so 112,233,600/28.3495231 = 3,629,013 ounces of
> gold well on the way to the projected 5m ounces.
>
> 3,629,013 oz x $1637 (price of gold) = $5,940,694,981 value of
> contained metal. The return on cost of metal is $49.36/ $73.01 =
> 67.7%. so 67.7% x $5,940,694,981 = $4,021,850,502 or with 280m
> securities on issue it should be $14.36 a share.
>
> A start up project should only trade at 2.5% of its value however so
> discount that back to 2.5% of $14.36 being $0.36 a share just for the
> gold component.
>
> Copper is easy. Average "market" EV should be between $50 and $200 a
> tonne of copper equivalent. I think they will have 2.5m tonnes of
> copper equivalent. At $50 EV. 2.5m x $50 = $125,000,000 which at 280m
> shares on issue is $0.44 per share or $200 EV it would be 4 x $0.44 per
> share of $1.79
>
> So valuations could be a low of $0.80 or a high of $2.18.
>
> Gold $0.36 + copper at "EV of $50" $0.44 = $0.80 or Gold $0.36 +
> copper
> at "EV of $200" $1.76 = $2.18.
>
> These numbers still need to be checked and they are target numbers.
> They don't take into account changes in gold prices and other risks. If
> you want a list of these risks then let me know and I can email you.
>
> But the point is at 18c the stock looks very cheap but we won't know
> the
> true value and if they reach the targets for JORC until December.
>