potash price predictions, page-7

ADY curreny Market Capitalisation = $200M Approx

Slide 15 of ADY's April (090408) Presentation:

Production target 2009/10
8,000 tonnes LiCO3 – 99.0+%
2,000 tonnes LiCO3 – 99.9+%
3,000 tonnes LiCl – 99.0+%
4,000 tonnes LiOH – 99.0+%
Projected Revenue $123.4m
80,000 tonnes KCL – 99.75%
Projected Revenue $23.2
Total Revenue US$146.6m
Opex $43.0m
Gross Profit $103m

If US$500 Potash Price used

Revenue:
Lithium $123.4M
Potash $40.0M

Total Revenue $163.4M

Less Opex $43.0M

Gross Profit $120.4M


Estimated Capital Expenditure :

Capex is grade B estimate of $106.46m ($15m contingency) – 3 years - see ASX release (Source: PT 03/04/08)

Capital Expenditure paid back in less than 12 months of full operation.

Therefore, after ADY has paid back capital expenditure after twelve months, ADY is currently valued at less than 2 x EBITDA of the lithium/potash side of the business alone.

For the iron ore, with a FOB price of $81.85, ADY's iron ore business is profitable irrespective of the volume produced (excluding any losses on fixed price contracts entered into).

I say let ADY concentrate on the Lithium/potash side of the business as it is currently undervalued based on this business alone. Let the iron ore customers fund the expansion in iron ore business, just make sure ADY is not exposed to any losses from this expansion.



Regards

SP