As they said that the copper will be shortage and price is going to $3, i think its realistic if we can achieve at least average copper price of $2.2 over the next 7 years.
AISC $1.61 /LB
12KT CU = 26.45M LB produced
LOM 7 yrs
assuming $2.2 per LB revenue
total profit over LOM is 7 x 26.45 x (2.2-1.61) = $111.09M
assuming 30% tax, profit over LOM is reduced to US$77.8M
AISC is including recovering of mine development cost which is USD $76.6M.
cash on hand USD$21M
so if we can achieve average copper price of $2.2/LB, in 7 years if AN operating as expected and no additional improvement the company should have $77.8M + $76.6M + $21M = USD$175M = AUD 233.8M (AUD / USD of 0.75)
from the current market cap of AUD 122.8M to $233.8M (assuming the company only have cash) after 7 years = ~9.6% compounding annual return.
AVB Price at posting:
4.8¢ Sentiment: Hold Disclosure: Held
