nice silver play

I have had a good look at CCU over the past week and am indeed impressed at what I found.Apparently this is Australia's largest undeveloped pure silver play. They are close to production have top shelf Management who dont seem to shaft their shareholders. Their last two placements are testiment to this.With lead credits included, the costs are low and the resource is at a shallow depth. There is also a significant exploration upside. So far so good.

I have included a few quick calculations here. I realise for a commodity Company such as CCU an NPV would be more suffice due to their resource not been infinite but these calculations are useful to compare to the current shareprice and to gauge the potential of where this could head.

$30 million is required to get this processing facility going and I am sure there will some debt facility used here but if CCU do a full CR at current prices then I get a final tally of 225 million shares issued.

I have used a low case of $22 an ounce for silver, the current price of $27 and an upper case of $32.

At the current plan of producing 2.6 million onces a year for five years I get:

$22 an ounce $27 an ounce $32 an ounce
Income $57,200,000 $70,200,000 $83,200,000
Less cots $16,900,000 $16,900,000 $16,900,000
EBIT $40,300,000 $53,300,000 $66,300,000
EPS 18 cents 23 cents 30 cents
SP 63 cents 80.5 cents 105 cents

I have used a PE ratio of 3.5 for a 5 year mine.

So at the current time I have a SP of 80.5 cents going by current silver price and mine plan.

However what really excite me here is the potential to add to reserves.Currently CCU has:

14 moz of reserves
51 moz of resources.

That suggests to me that there is a very good chance of a significant upgrade in reserves.

IF reserves increases to 20,800,000 moz (a 50% increase) just a figure I made up then CCU could produce the same amount of silver but have a 8 year mine life.We then get:

Silver price $22 an ounce $27 an ounce $32 an ounce
EPS 18 cents 23 cents 30 cents
SP 108 cents 138 cents 180 cents

I have used a PE of 6 for an 8 year mine.Just another assumption.

I understand that CCU hit around 40 cents this time last year after a tip sheet came out recommending CCU.The SP has retreated since then and came back up to reach new highs and is back to around 40 cents.However since then the feasibility has been done, silver prices are way higher and the of course the project is closer to production.

Some hotcopper people buy stocks and expect the SP to go into orbit straight away however of course this rarely happens. I am not sure if CCU's SP will be higher or lower next week or even next Month but the fundamentals are compelling I am confident that CCU will reward shareholders handsomely over the next couple of years. Of course there may be some macro event that may spoil the party but CCU can only do so much and I have been impressed with what has been achieved thus far.

Can anyone please enlighten me as to what the chances are of a takeover before production and just when can we expect further exploration results?