Li2O content 5.5%-6.2% .Avg.: $US 5,510/tThats probably a reasonable guide to contract prices currently although likely higher and puts a margin over AISC costs of around $US5000 so where would that leave CXO when fully ramped up to around 180,000tpa, very nicely as it so happens.
Gross revenue $US991m
Nett of AISC $US900m
Nett of tax $US630m or $A926m at today's exchange rate ÷ SOI 1.838b = 49c per share vs current shareprice $1.18
The above is very approximate and variables, especially Spod price and the exchange rate, are considerable ,however they could just easily be better than worse over the short term. Also note ramp up to full production will take a while and any margins during ramp up will be lower.
The intention here is just to point out that we could have the margin at half the above and would still be very profitable and the current shareprice a bargain IMO.
Spod prices will soften over time and the $A strengthen but anyone trying to put a figure on that in any particular timeframe is guessing and we can do that ourselves just as easily as a institution and be just as biased..
All this is done from a strong cash position and no debt...from a perception point of view CXO does have very small resources and lower grades compared to some but that doesn't change the companies profitability and that will be the biggest driver of the shareprice over time , production will evetually increase and downstream conversion likely follow at some point.
More important than resource size and grades is the fact we are about to go into concentrate production, its not years away.
The World has not ended...
Cheers Whisky
