where to now and what values to expect?

More number crunching...

At base rate, the LOM cash surplus, before tax and excluding payback of Capex is $378.5 million.

Source:
30 Sept – Positive Pre-Feasibility Study for Mt Garnet Tin Project
http://www.csdtin.com.au/asx-releases/2013-asx-releases/

Subtract 80 million for the CAPEX and tax at 30 cents. This leaves a net profit of $208.95 million over the 9 years, or $23.21 million annual profit.

This latest agreement has not changed that fact, if anything it has further ensured that CSD will make it. What has changed is the share of profits.

After the deal, there will be 565.6 million shares on issue (according to my calculations). That means, fully diluted, the profit will be 0.041 cents per share. If you use a PE of 10, that gives 41 cents per share, or 5 times its current worth.

The big question now is, how will the $76 million be funded? I would be hoping that it will be through low-cost debt, operational cash-flow and perhaps a take-off arrangement (although Darryl has suggest otherwise).

However, let's take into account another equity increase. If 760 million shares are needed (@ 10 cents), then the number of shares on issue would become 1,325.5 million shares.

Now, since the CAPEX doesn't need to be paid back, then if we tax the original amount at 30 cents, that gives $264.95 million, or 19.9 cents per share fully diluted (1,325.5 million shares). That is 2.5 times current share price.

Hmm, seeing that this agreement now gives us cash-flow and security, I'm not too bothered about this dirty word called 'dilution'. Where else can you pretty much guarantee at least 2.5 times your money, and probably more likely to be great than 5 times your money, in less than a year?

I've said it before, and I'll say it again, CSD is significantly undervalued given its current position.

At current tin prices, you can also add another 0.5 cents per share to earnings fully diluted (565.5 million shares) or 0.2 cents if diluted to 1,325.5 million shares.

The upside is huge. The downside is minimal.

After crunching the numbers all weekend, I have placed my sentiment back to a long-term buy. This might be a good chance for those late-entry bidders to pick up some significant number of shares.

I'm actually hoping for some majors to start to look at entering the share registry, but time will tell.

BTW, unless Ralph has something more up his sleeve or the big guys move in, the 20 cent oppies are looking short, which is a shame because the company could have used that money. If only that concentrator had started in April like it was first suggested.

It is disappointing really. We will get to the oppies' price eventually, just by 31 December might be out of the question. My fingers are crossed, yet starting to ache. If only there was a glimmer of hope. Hmm, tin price hitting 30k might do it... Aussie dropping 10 cents would do it.

C'mon CSD and tin, gives that hope.

;-)

Happy hunting.