88c target maintained by fox davies, page-7

On a rough sum of the parts type valuation, I get-


................cps (cents per share)
Cash..........64 ($227mil cash estimate)
WD............21.1 (20k oz qtr X 75% X $1250 X 4 / 1mil / 355 SOI)
Royalty.......03.2 (35mil / 355 SOI / 3)
Tennements....07 (estimate, best guess)
Costs........(13.5) (costs about 12mil per qtr, to run the show)

Total.........81.8 cps (estimate)

The real question comes with, what the SP might be Ex- Dividend.

If you take the numbers above, minus $135mil, you get-

Cash..........25.9
WD............21.1
Royalty.......03.2
Tennements....07
Costs........(14)

Total.........43.2 cps

I like to use a range of +/- 10%, rather than a set price, so a range between 38.5 - 47.5 cps ex-div

Then if the divi is 38cps and the franking credit is 12cps, a total of 50cps, and you add this to the range (above), at a SP between 88.5 - 97.5 cps is the break even point.

Who knows weather this will be reached, especially in the current market.

I expect a bid up for the dividend when it is formally announced.


I know there are some debatable numbers above, but I try to be nearly right and not completely wrong.

Make of them what you will.

cheers