lynas valuation

Assumptions:

-LAMP achieves & maintains production status
-Production of 11m kg / year (Phase 1)
-Production Costs of $15/kg
-Number of Shares 1.7bn
-Tax of 15% (guesstimate combining royalty and portion of taxable revenue in Oz)
-Contingency Costs/Sustaining Capex 15% of revenue
-P/E = 12

At Basket Price (BP) of $50
-Revenue = $550m
-Prod Costs = $165m
-Sustaining Capex/Contingency = $83m
-Simple Earnings Before Tax (SEBT) = $303m
-Simple Earnings After Tax (SEAT) = $257m
-EPS = 15.125c
-SP = $1.83

NOTE: This is with Basket Price (BP) of only $50.00/kg

At BP = $55, SP = $2.11
At BP = $60, SP = $2.39
At BP = $65, SP = $2.67
At BP = $70, SP = $2.95
At BP = $75, SP = $3.24
At BP = $80, SP = $3.52
At BP = $85, SP = $3.80


If the P/E = 15, we would need a BP of $74.29/kg (under the above assumptions, for Phase 1 only) to achieve $4 SP


NOTE: This is based on Phase 1 ONLY and includes (IMO) considerable commercial contingency.


Based on 22m kg/year (under above assumptions, P/E = 12):


At BP = $50, SP = $3.65
At BP = $55, SP = $4.22
At BP = $60, SP = $4.78
At BP = $65, SP = $5.34
At BP = $70, SP = $5.91
At BP = $75, SP = $6.47
At BP = $80, SP = $7.04
At BP = $85, SP = $7.60

Hopefully this provides some perspective and if anyone has refinements to propose to the above, please post and I'll attempt to include them in my calculator and re-post the values when I have time.

Cheers

Freighter