According to Mr Ben's Q&A during last year 12 Dec 2017, and refer to latest AGM Presentation slides page 8 for all the data, below are my estimation to AUZ share price target,
1) The AUZ Sconi project produces 100,000 tonnes of nickel sulphides and 12,000 tonnes of cobalt sulphides per year over 20 years of mining (refer to AGM Presentation page 8 and 12 Dec Q&A) Nickel sulphides’s unit price are 20% of nickel metal unit price and cobalt sulphides’s unit price are cobalt 20% of the metal unit price, the current London Metal Exchange, cobalt price 81000 US dollars / ton, nickel price is 13000 US dollars / ton,
2) So, the annual revenue from cobalt and nickel is: 100000 x 13000 x 0.2 + 12000 x 81000 x 0.2 = 454.4 million USD
3) one tonne ~ 2204.6 pounds, Sconi annual production of nickel is 100000 * 2204.4 = 220.46 million pounds, according to the cost of CLQ,refer to CLQ PFS, the cost per pound of nickel is 0.89 dollars, the annual cost is 196.2 million U.S. dollars
4) Refer to AUZ's PFS dated on 2013 with regards to scandium estimated revenue, AUZ can produce 50 tons of Scandium every year, mine life for 20 years, according to the report, Scandium annual revenue will be 50 mil USD roughly
5) Gross profit per annum = 454.4 + 50 - 196.2 = 308.2 million USD, if we consider other expenses as 100 mil USD per year in a conservative way, it is estimated that sconi annual net profit will be 208 million US dollars, which is equivalent to 264 million Australian dollars;
5) So, Earning per share = 264 million Australian dollar / 2608 million shares = 0.101 Australian dollars per share
6) If Price / Earning ratio is calculated on the basis of 30 and the AUZ solely considers the sconi project, its fair share price should be 0.101 x 30 = 3.04 AUD $ per share, If we add Flemington and Thackaringa and other gold projects, Can AUZ hit 6 AUD$ per share??
If you want to be much more safe, you may change the top mentioned parameters yourself and calculate the target share price yourself, please correct me if there are any process of calculation if improper if you are an value investor. Thanks and hope all AUZ value holders's dream realised!!
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