just read thru the ccu pres as listed on asx on 7/12.one slide...

just read thru the ccu pres as listed on asx on 7/12.

one slide really caught my eye. check out slide 13 (that's page 14 of pdf) re reserve upside potential.

current jorc silver reserve is 13Moz. (not sure why they quote a "probable" ore reserve of 14Moz on this slide?). anyway, the key point is they refer to a potential RESERVE UPSIDE of 40Moz (i.e. potential is 53M oz total reserve.)

this is a potential QUADRUPLING of the current ccu silver ore reserve. this could extend the mine life from 5 to 20 years at current planned production rates or, allow a greater investment in processing cap equip for greater annual production, or both!

some back of the envelope bush-accounting figures:

at current silver price of $30/oz, conservative total cost of $10/oz and current planned annual production of 2.6M oz/yr => $20 x 2.6M oz = EBIT of $52M per annum. (over a 20 year operation the current planned plant capex of $30M is a mere $1.5M per annum.) this implies earnings before tax of $50M per annum. applying a P/E ratio of 10 => $500M market cap! (note: not sure if P/E ratio is applied to before-tax or after-tax earnings?)

based on before-tax earnings: 145M shares (fully diluted) => share price of $3.45 (500/145). food for thought?

pls note that i'm am engineer not an accountant so feel free to correct my calulations ...

k