Well its quite simple really...Say the LAMP produces 22ktpa @...

Well its quite simple really...

Say the LAMP produces 22ktpa @ $20/t accounting for all wages, processing costs and fees etc. Current Mt Weld basket price is $37/kg.

http://www.lynascorp.com/page.asp?category_id=1&page_id=25

It was $63/kg two quarters ago, and $53/kg just a few months ago. The trend is well and truly down (hard to argue a basket price any higher than where it is currently), but I believe that long term prices for LYC's basket will settle around the $35 per kg mark.

So working on a margin of $15/kg, they will generate a gross profit of $15/kg on 22,000,000kg each year.

EBITDA roughly equal to $330Mpa when LAMP is fully ramped up.

I've noticed that the market generally values emerging producers like LYC at about 5x EBITDA (not to be confused with NPAT). With 1.96B shares on issue, a fully ramped up LAMP would value LYC at about 85c per share.

The trouble though is that there is just so much risk in between (execution risk, price risk, sovereign risk), and that is why the market is pricing it at 60c and not full value at 85c.