Hello guys,I just had a look at the quarterly production of...

Hello guys,

I just had a look at the quarterly production of Northparkes Copper mines from RIO Website. Northparkes copper mine was taken over by a chinese company for $830 million.

They have been operating for the whole year of 2012 and till first half of 2013.

Their average production per quarter is 11.4 tons of copper.

so annually, the production is as 45.8 tons of copper annually @1.0% grade.

Copper credit:

Gold = 15,200 oz (0.53%)$1300

Annual sales (copper): 45800X($3.09/lb X2.2x1000) = $311 million

Annual sales (Gold): 15,200X($1350/oz) = $20.5 million


Total sales: $331.5 million.

Price Sold: $830 million

Price/Sales ratio: 2.5


Now, we look into our good trusty PNA and do a Price/Sales Ratio


TOTAL SALES:

COPPER 65,000 x(3.09x2.2X1000) = $441. million
Gold 110,000 oz X ($1350/oz) = $148.5 million

total sales = $589.5 million

If we assume a Price/Sale Ratio of 2.5

Then, a theoretical current market value is calculated as follow:


PRICE/SALES = PS RATIO

PRICE = $589 MILLION x 2.5
= $1473 MILLION

THEORETICAL TAKEOVER VALUE: $1473 MILLION/600 MILLION SHARES
= $2.45 PER SHARE.

So I would say that, this is close to the actual market value of the company.


let us hope there is a take over coming soon....

superox