time to present the numbers again

As there are a few new posters to RCH, I thought I would wheel out the numbers as I calculate them based on real feasibility studies.

The following model assumes (as you would) that their high grade zone (very rare occurance) is mined first. This covers the first 7 years and will pay back all project debt.

I've used a long term Mo price of $US20lb rather than the current price of $US34lb.

This is basically looking at the project in year 2 (after 1 years full ramp up). It allows for a very generous capex of $US750M (more than enough) and debt repayment of $100M p.a. plus interest.

The cash suplus after debt servicing is $A393 Million p.a. for the project.

RCHs share is 71.25% of 50% (assumes 50% owned by a JV partner) or $A115M p.a.

Assuming RCH has to say raise another $10M on top of option conversions, the market cap fully diluted would be about $110M.

So with a 50% JV (typically would be with a Jap steel mill) RCH shareholders will earn a pre tax cash surplus of $115M on a market cap of $110M. Clear the upside for the share price is easily 10 - 15 times during the first few years while the debt is being retired

The current share price is simply dirt cheap. Should the Moly price not fall from $US34 to $US20 then the numbers would be very significantly higher.

How they fund the equity component will be the trick. A JV is the way they want to go and thats the smart option. Don't pretend you can get a project this big off the ground as a junior resource company.

Now this model is based on a published feasibility study completed by a international engineering consultancy for a Canadian project.

Based on a 9 Million tonne p.a. Mill Capacity

Total Material Mined 22,000,000 tonnes
Milled 9,000,000
Stock Pile 1,000,000
Waste 12,000,000

Cost/t/mined $US4.54
Cost/t Milled $US11.11

Total Annual Production Costs $US100,000,000 per annum

Milled 9,000,000 tonnes
Grade 0.19% Mo (high grade core)
Contained 17,237 tonnes of MoS2
Recovery 87%
Recovered 14,996
Loss in Roaster 1.50%
Metal Available For Sale 14,771 tonnes
=15,280,423 kg
=33,616,931 lb
$US $672,338,621
Deduct 2% marketing -$13,446,772
Deduct Transport @ $US150 t = -$2,292,063
Roasting Charge @ 1.98 kg = -$30,255,238

Net Revenue $US $626,344,547 PER ANNUM

Less Production Costs -$100,000,000 p.a.
Less Sustaining Capex -$5,000,000 p.a.
Less Interest -$50,000,000 p.a.
Less Deprection of plant (10 yrs) -$75,000,000
Less Head Office -$10,000,000

Net Profit Befor Tax $US386,344,547

Add Back Depn $75,000,000
Add Back Interest $50,000,000

EBITDA $US511,344,547

Less Interest -$50,000,000
less Debt Pmt -$100,000,000

Cash Surplus $US361,344,547 PER ANNUM (years 2- 7)

= $A393 Million per annum