There is probably not a lot of upside left for shorters at the current SP. ORE has transformed from a speccy to a producer with a reasonably steady cash flow. Back of the envelope, the company has stated it should receive approx 50mil p.a.from SDJSA less corporate expenses of approx. 5mil i.e. approx 45mil. . I assume no profit from Borax. At a P/E of 15 ......675mil or 3.23 per share.
I think this is conservative, so I don't think there is much more downside if the LiCO3 price stays around $10,000/t. The other variables are, there might be a drop in production costs to $2,500/t and of course a new blue sky event if production expansion is announced.
All in all I think the current SP is fair value with little further downside. If this does occur I would consider it a buying opportunity.
P
ORE Price at posting:
$3.36 Sentiment: Hold Disclosure: Held
