REE prices., page-3

CJ You cannot value a company by assuming it equals the Balance Sheet NAV. The valuation methodology applicable here is NPV. NPV = the present day value of LYC's cashflow over its minelife. So I did a very quick calculation:
Assumptions:
1. Minelife 25 yrs
2. NdPr price US$61.16/kg for 25 yrs
3. AUDUSD 0.78 for 25 yrs
4. OPEX fixed at A$216m pa
5. Debt all repaid in 2018
6. Tax free until and including 2025. Thereafter 30%
7. Sustaining capital = A$12m pa
8. Discount rate = 6%
9. NOS = 7111m
Result:
1. NPV = A$3.8b. NPV per share = A$0.53
This is the current value of LYC on the basis of the above assumptions.

Now I was interested to determine the sensitivity of LYC'c value to the NdPr price. So I increased the NdPr price by US$10kg for the entire 25 yrs. The Result:
NPV = A$4.5b. NPV per share = A$0.63.

So simply put an increase in NrPr price of US1kg increases the NPV per share by A$0.01. Theoretically the share price should eventually increase by 1 cps to reflect this.

It is interesting to note that the Tax Free status of LYC up to and including 2025 is responsible for A$0.09cps (17%) of  LYC's NPV value of A$0.53.  I suspect this is not reflected in the current SP.

There you have it.