Followed this one for a while given the press it used to get over prospects in the Pilbara.
Now it seems that there is a chance that the Yilgarn resource may go ahead.
I know that in the area the EPA really scrutinizes Banded Iron formations, and that CAZ still awaits approval sometime Sept 2010. Correc tme if I am wrong.
But the sums look great unless I have this VERY wrong..
4mt pa @ $100/tonne turnover $400 mill cost @$45/t so $180 mill pa leaves EBITA at $ $220 mill pa TAX at 30% leaves $154 mill pa Roughly 100 mill shares currently so $1.54 per share.
Obviously they will need to fund development so you could expect a substantial dilution or debt or joint venture.
But it makes the mind boggle for even at 30% of the above returns and a PE of 5, then the shares could eventually be trading at the end 2011/12 at $2.31.
Comments/ridicule greatfully accepted!
Pelsaert
CAZ Price at posting:
51.0¢ Sentiment: LT Buy Disclosure: Not Held
