valuation sensitivities based on basket value, page-2

Hi All,

If we take a full year of production (@ 22,000 tonnes), LYC share price would equate to about $11.95 assuming (a) price per kg of rare earth is $67/ kg, (b) Cost of $7/ kg to process and (c) PER of 15. (figures taken from companies presentation)

So at current prices, LYC is definitely undervalue. (if you do not agree with the calculation, please comment).

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Price / Kg $67 As at 22 Nov 2010
Cost / Kg $7
Profit $60

At 22,000 tonnes
Profit is $1,320,000,000
Number of shares on issue 1,657,000,000
Earning Per Share 0.8

Share Price assuming PER of 15 $11.95
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