valuation

Fellow holders ... Like many concerned with the falling sp ..I have completed a simple valuation of INL ( discount cash flow model) taking into consideration only the cash flows of the Polly JV combined with the equity value contained within the audited 30 June 2006 financial statements.

The valuation comes out at 13.65 cps.

Assumptions included:

1. Polly JV only..EBITDA $25M (before corporate costs)- this is the Mid case * 4 years life (zinc $us 1.50 per pound..1.5mtpa)
2. Equity $31m as per 30 June 2006 audited financials
3. SOI 558M Plus in the money options 36M @ avge 8c = fully diluted 594m soi and $3m extra cash
4. Discount value 9%
5. Corporate/admin costs $5m pa.
6. Tax losses available for utilisation $7.5m

Conclusion: (as we all suspect as holders) - At 16c the market is pricing into the share price very little value for future cashflows relating to INL's other projects ...

Namely:
1.EAFD & Zeehan slag projects (which management have indicated will commence in 2008 with in situ values of $> $300m )
2.The patented technology ( which is hopefully were the major value of INL will be derived).
3.Upside in BSM ( including the processing of ore from Que River)
4.The profits derived from the JRV investment
5. Zinc price outlook ( currently above US$1.50)
6. Potential to increase the Polly JV production to 2m tpa
7. etc

The market is no doubt waiting for further updates and clarity on the above from management including confirmation of its; strategies and priorities given the JRV corporate play. Hopefully the next quarterly will provide this much needed direction.

Hope this has been informative.

cheers


Disclaimer: normal disclaimers apply.