LYC 0.42% $2.38 lynas corporation limited

sanity

  1. 8,733 Posts.
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    A nerve tonic for those holding and getting scared...

    Subject: LYC research Likely earnings

    Assumptions:
    1,750,000,000 shares on issue including options,
    $9 per kilo production costs ( company argues for $7)
    Based on sales at $30 per kilo.
    Add 12.5cents per share for each additional $10 per kilo achieved for processed product above $30 per kilo.

    End result of data below is 22000 tonnes earnings of 63.5 cents per share if basket remains at $70 approx and rhodia take out 4000 tonnes at $15 per kg. So PE of 10 would indicate a possible share price of $6.30ish by next year if basket holds. More if basket or production facilities go up and of course less if basket goes down. Worst case scenario IMHO is $40 basket with 22,000 tonnes indicating a share price of $3.30 on PE of 10. I doubt we'll ever see that low a basket but an interesting figure upon which to base todays holdings and purchases. The $4 club looks pretty safe at sometime in 2011:)
    64 years of production already drilled at 22,000 tonnes per year

    Negative impact on figures below for Rhodia contract at following assumptions.
    4000 tonnes at $15 per kilo for Rhodia less 14.9 cents per share at $80
    4000 tonnes at $15 per kilo for Rhodia less 13 cents per share at $70
    4000 tonnes at $15 per kilo for Rhodia less 10.3 cents per share at $60
    4000 tonnes at $15 per kilo for Rhodia less 8 cents per share at $50
    4000 tonnes at $15 per kilo for Rhodia less 5.7 cents per share at $40
    4000 tonnes at $15 per kilo for Rhodia less 3.4 cents per share at $30



    Based on 11,000 tonnes in year 1= 13.2 cents per share @$30
    @$40 = 19.5 cents per share
    @$50 =25.7 cents per share
    @$60 =32 cents per share
    @$70 =38.3 cents per share
    @$80 =44.6 cents per share


    Based on 22000 tonnes in year 2=26.4 cents per share @$30
    @$40 = 39 cents per share
    @$50 =51.5 cents per share
    @$60 = 64 cents per share
    @$70 =76.5 cents per share
    @$80 =89 cents per share



    DYOR
 
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