2.68% \$9.97 oz minerals limited

# potential profits for 2010

1. 2,900 Posts.
171
Based on OZ minerals latest presentation for 2010 and based on the following assumptions (inputs):-

-average copper price of \$3.35/lb
-US/AUS 0.89cents
- 100 -110 KT/pa of copper (Take 105000 Tonnes)
-C1 Costs of 0.85 - 0.95cents/lb (take 0.90c/lb)(for 2010 ONLY)
-corporate costs of \$47million
-exploration costs of \$20M
- Other costs of \$23M
- Depreciation/amortisation (assuming 9 year life)=\$115 M p.a
- 3150 Million shares
-Assume neutral currency movements (zero nett effects)

Revenue = \$869 M
Operating Surplus (R - C1)= \$636 M

Profit before depreciation and tax = \$636M - 47M-20M-23M = ======\$546 M

Nett Profit (after tax and depr) = (\$546 M - 115) x 70%

Nett Profit = \$301 Million

EPS = 9.6 cents per share (using 15.9 as P/E average) would conservativley give a SP of \$1.52.

However if you consider the free cash flow for next year only. Oz minerals will produce a free cash flow of \$546 million, as deprec. is a non cash deduction and there is no tax for next year (due to recurring losses).

This will enable OZ minerals to provide a dividend of about 2.5-3 cents per share for the second half of 2010. (using 45% Payout ratio. IF it chooses to, however I would prefer them to use the cash to grow the company organically.

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