My maths, and they may be wrong and definitely include some assumptions, sa;
10Kt Cu @ US$7,000/t = US$70M
15Kt Zn @ US$3,000/t = US$45M
50KOz Au @ US$750/Oz = US$37.5M
0.6MOz Ag @ US$12/Oz = US$6M
Total = US$160M or ~A$190M approx of revenues
Costs, well, assume A$50M p.a. opex, and EBIT comes in at $140M or 1c/sh
Assuming we want to pay them up at a moderate PER of 5x, this means your shares will get back up to 5c. Of course, the hidden gift to existing holders is the ability to participate in the SPP at 2c, and get 1c of EPS on those new shares. That's not a bad deal for SPP buyers.
I don't think anyone would doubt they will do a consolidation eventually, of at least 10 to 1.
Another thing to point out is that the SVC and SAPEX guys are forwarding a loan in addition to the existing US$1660M debt, to give operating cash. So the company is coming out worth $200M (2c x 10B) after its creditors amortise $200M debt by rolling in at $100M.
I think this is a good deal. The main advantage will be the de-hedging, and the upside is a woefully small 1c EPS.
LAF
lafayette mining limited
