monday, page-5

Just to add to my previous post regarding free cash flow, it is worth looking at an upside case, remembering this company is unhedged to Cu price.

Let's take the ramped up production of 25k tpa = 55m lb pa with a cash cost of the estimated AUD 0.67cents per lb and a sale price for the Cu close to the current spot = USD3.50 p lb @ AUD exchange rate of AUD0.85 = USD1.00

55,000,000 * 3.50 / 0.85 = AUD 226.5m

minus costs

55,000,000 * 0.67 = AUD 37m

Net free cash flow = AUD189.5m pa

How's that? Please correct me if I'm wrong....check out the market cap of this company that will be in production at the lower rate of 19k tpa (42m lb pa), commencing from 3rd quarter ( ie. July start up). Depending on your outlook for the Cu price, there is upside from this as well (as well as downside to be fair).

Regards
DF