I will refresh your memories as to what future earnings may be...

I will refresh your memories as to what future earnings may be in year 2010.


Santa Barbara Iron Ore (ADY).

Year 2010


Tonnage I/O Price Earnings USD

7,200,000 81.85 $589,320,000.00

60% ADY Equals $353,592,000.00

Less OPEX @ 0.333 $117,746,136.00

EBIT = $235,845,864.00

NPAT = $165,092,104.80

AUD $1.00 = US 0.90c

NPAT AUD $183,435,672.00

Shares = 280,000,000

EPS = $0.66

PE of 8 = $5.24


SHARE PRICE = $5.24


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Now take the Lithium side for 2010.
These figures are for the consolidatated number of shares:
i.e. 280,000,000 shares


Rincon Lithium (RLL).

Year 2010


Tonnage Li Price Earnings

17,000 6,500 $110,500,000 (LITHIUM).

77000 290 $22,330,000 (POTASH).

$132,830,000 TOTAL

Less OPEX $35,000,000 $97,830,000 EBIT

Less Tax 30% $29,349,000 $68,481,000 NPAT USD

AUD $1.00 USD 0.9

AUD = $76,090,000 NPAT AUD

SHARES = 280,000,000

EPS = $0.27 EPS

P.E. 15 $4.08 P.E.


SHARE PRICE = $4.08


Combined share price iron/ore & lithium = $9.32

Not a bad share price at $9.32cents.


Now take the scenario of increasing the Punta Alcade Port by providing an additional 2nd bay to slot in an extra Panamax iron ore ship thus shipping 10 million tonnes.


(PE of 8 used for the iron ore - could even be 10 or 12).
Santa Barbara Iron Ore (ADY).

Year 2010

Tonnage I/O Price Earnings USD

10,000,000 81.85 $818,500,000.00

60% ADY Equals $491,100,000.00

Less OPEX @ 0.333 $163,536,300.00

EBIT = $327,563,700.00

NPAT = $229,294,590.00

AUD $1.00 = US 0.90c

NPAT AUD $254,771,766.67

Shares = 280,000,000

EPS = $0.91

PE of 8 = $7.28

SHARE PRICE = $7.28


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Now factor in 4 production boreholes in the Rincon Salar instead of the one borehole (this will produce 68,000 tonnes of lithium and 308,000 tonnes of potash.


4 Bore Holes Increases Tonnage to 68,000 Tonnes.
(By having 4 production bore holes=4 x 17,000T = 68,000TPA).
(PE of 15 is considered general for chemical companies).
Rincon Lithium (RLL).

Year 2010

Tonnage Li Price Earnings

68,000 6,500 $442,000,000 (LITHIUM).

308000 290 $89,320,000 (POTASH).

$531,320,000 TOTAL

Less OPEX $132,600,000 $398,720,000 EBIT

Less Tax 30% $119,616,000 $279,104,000 NPAT USD

AUD $1.00 USD 0.9

AUD = $310,115,556 NPAT AUD

SHARES = 280,000,000

EPS = $1.11 EPS

P.E. 15 $16.61
SHARE PRICE = $16.61

Combined share price I/O & Lithium 2010 = $23.89

Remember ADY bought the Salar Rio Grande for the express purpose of providing free sodium chloride used in processing the lithium so OPEX could be considerably lower.
I hope someone can assist and if my figures are wrong I'd appreciate input, but hoopieyfucndoooo - not a bad number at $23.89 total,

cheers,

Ray.