What's the value of CFE now?

I'm interested in what people think CFE might be worth now?

We all know that after paying the first dividend CFE's share price went down to about 9 cents, which was below the cash and cash equivilants value of about 11 cents a share. That was the market valuing Marampa and all the other assets as Zero Dollars and discounting the value of cash and all the cash equivilant investments such as European lithium etc by 2 cents.

So going forward, now that African Minerals has said that Timis Corporation can use the port for up to 6 Mwmt of IO exports that means we have about $12 million a year minimum coming from that alone. Or about 2 cents a share. The $20 million we have loaned to Frank will be returned within 12 months. That is the $8 million plus interest loan plus the first 12 months royalty.

The up side on it is that African Minerals want to blend the Marampa Ore with the Tonkatill DSO ore so they can sell it into Europe. Does that mean that they will now mine more than 6Mwmt a year? I think it does as the capacity for shipment by London Mining was hampered by their rail and port infrastructure. That will not be the case now as they will be using African Minerals infrastructure.

To me that means there is a very high probability that they will be taking off more than 6 Mwmt a year from Marampa and most likely fast track the mining from CFE's Marampa licence as well. I'm sure the Govt there will fast track all approvals to make sure the project continues to steam ahead as they do need the cash to fight Ebola and for the economy.

The next fully franked dividend of 2 cents in Feb 2015 is a 20% return on the current 10.5 cent share price. I can see dividends coming on a regular basis over at least the next 4 years, and I think those dividends will be at least 3 cents a year. Therefore a 3 cent fully franked return on a SP of 40 cents is 7.5% plus you still have franking credits. Where can you get that sort of return today.

I have always thought CFE has been well and truely oversold because of IO falling out of love but this current arrangement is money for Jam for us. We sit back and keep accumulating royalties. Good for all CFE holders who do include African Minerals (18%).

Because of Melbourne Cup day tomorrow I don't think we will have a massive surge, unless of course some of the bigger institutionals get in before Mum and Dads do. I'll be watching the horses but I will have one eye on CFE as well.

My price for CFE is at least 60 cents, and I'm not joking.

3 cents a year for 10 years from Marampa = 30 cents + Cash and cash equivilants 11 cents, which is 41 cents. Another 30 years of mining royalties or takeover is worth at least another 19 cents now.

Good luck with the Cup and with CFE.