lets assume that they manage to expand output to 20,000 tonnes...

lets assume that they manage to expand output to 20,000 tonnes per annum

lets assume avg nickel price over next few years at $15,000US and exchange rate 75USD for 1 aussie

20,000 * 15,000 * 1.33 (exchange rate in AUD/US) = $400 mill in revenue per annum

Net profit margin is around the usual 0.3

number of shares approx 130mill

EPS (based on 15,000 USD per tonne Ni price) is:

400mill revenue * 0.3 / 130mill = 0.923 cents per share

there you go, thats why guys like macquarie are saying a ball park figure around $9 per share if you give a P/E of around 10ish

Note this is very simplistic valuation though and is not the traditional DCF using a discount rate and then adding on 'exploration potential'.

Given the special nature of the land that harmanis has been harping on about , its is quite probable that reserves will be increased to the pt where they WILL BE ABLE to produce 20,000 tonnes per annum for a number of years.

In this case the figures above suggest a $9+ valuation plus the high divvys as usual.

If we use a higher nickel price than 15,000 (its around 20,000 now), do the maths (!!!!) although 15,000 US/tonne is a fair estimate over the next few yrs.

Hey im not an analyst, so dont take my figures too seriously - its just a simplistic look at valuation, but brings the pt across

adios