Awhile back an astute poster put up a SP valuation model based...

Awhile back an astute poster put up a SP valuation model based on certain assumptions which I have updated only to validate the criteria used:

Assumptions:
1,750,000,000 shares on issue ( includes all current options)

Costs $9 per tonne ( conservative as LYC argues $7 )

Basket price $108/kg ( then apply a 5% reduction in basket price that applies for early customers who sign up to long term contracts )

PE 10:1 ( the basis for this multiple is the likely 10 year supply contract for the Sojitz deal in the LYC announcement dated 24th Nov10 effectively guaranteeing earning for this period )

$10m HQ costs pa

Valuation scenarios:

11,000 tonnes mined earnings 59.5 cents per share. PE 10:1 share price $5.95 ( ...might have to start the splinter $5.95 club club!! )

22,000 tonnes mined earnings $1.195 cents per share PE 10:1 share price $11.95