short term price catalysts, page-49

cheers andrewss, yep there will be people exiting if contracts are not forthcoming but will be gradual attrition over a year as realization sets in. This would be a delay rather than a zero outcome as the slag issue is not going away. But what price do we put on Geelong and Silica? 8.5mill profit pa at a p/e of 10 is 85mill, plus whatever the market values the other assets. So the price at 80c had a lot of floor under it even without USA.

That said I think the chances of there not being at least one plant go ahead in the states are zero ( too many slag issues, no competitor) and contracts should be v.close now. The only variables are how profitable that plant will be and until we get that figure it is tough to guess where we will re-rate to once announced. Its not complicated maths to figure it is a multiple of current profit due to the throughput estimates relative to geelong. Should give us a nice multiple in the SP.

Basically the issues holding us back I believe are temporary by their nature - the plant working was the only real risk and that is now removed. A working plant means overseas adoption of the tech - inevitable but taking more time than first thought. Anyway my take at this story is that it is not a hit or miss, boom or bust type play and that was the point I was trying to make. Plenty of near term upside, little near or long term downside risk from 80c.