goodes research : buy up to 90 cents

Goode's research did not come out so clear in Bigfoot1's previous message... here's my attempt at the key points...

KEITH GOODE - ERA: VULCAN RESOURCES LIMITED

Herewith our latest report on Vulcan Resources (VCN) rating it as a BUY with a target of >A$0.90 per share (and a current NPV of A$0.79/share).

The valuation is based just on its Kylylahti Cu-Co-Ni mine in Finland on which a BFS is almost complete...

... VCNs share price has recently dropped over 20c since closing at 60c on 7 Nov 2007, to yesterday’s close at 37c on 19 Nov 2007 in a dramatic overkill on announcing a 3-month delay to completion of the BFS – probably to MQ08, which has dropped our estimates of the PER to just over 3.1 to 3.2 x when its starts production in 2010 – yes, yet another 3 x multiple stock – and we all know that they rarely stay at 3 x (times) for long....

...So, Vulcan’s Outokumpu like orebody, well the metallurgy is a done deal, and Finland is beyond a first world country with a difference, some of its population appear to want to have mines, and power is cheap, being hydro.

We have self-financed our model using an estimated 190m Euro or A$310m as the all-in straight debt facility required for the capex - note these are our (ERA) estimated numbers..

And despite that, VCN’s NPV on 27-month (LME forward) metal prices is still more than double the current share price – rating VCN as a BUY.