earnings per share Ive just done some calculations based on the...

earnings per share Ive just done some calculations based on the Internal Rate of Return quoted by the company following the 2005 Feasability Study. The results appear below. Listed at the top are the figures Ive based my calculations on.

Internal rate of return @nickel price $15000 US =45%
9000 tonnes nickel concentrate per year
Project cost $80m AU (Agm said $77 for 6000 tonnes/annum, not much more for 9000 tonnes per annum)
10% inflation rate
8 year mine life

Ive also assumed $1US= $0.80AU, originally AGM used $0.73AU but we are at $0.78AU aprox now, so to be safe Ive used $0.80.

Nickel Price $us Earnings per share $au

15000- 0.05
20000- 0.11
25000- 0.16
30000- 0.22
35000- 0.28
40000- 0.34
45000- 0.39


The calculations err very much on the conservative side, and assume Jinchuans profits are maintained at 25% of the nickel metal price. This may be on the high side, any reduction goes directly into the earnings per share.

You can use whater multiple you think appropriate to project a share price. If Saxon contains a mineable amount of ore, the multiple increases in proportion to the amount found.

Looks good to me!