I'm having a tough time finding the sulfuric acid spot price and our sulfuric acid consumption figures. Do you know how to find these?
Your projection suggests lower nickel+cobalt price and 10% higher production leading to only 2% higher revenue in 2011.
My projection of a possible $300m gross profit includes 30% higher production (35,000 tonnes) and nickel price of $26,000/tn. But that does not include change in sulfuric acid, since I can't find the figures.
nickel 21,000 x 26,000 = $546m cobalt 1,350 x 40,000 = $54m
total revenue (MRE share) = $600m
Using your $400m expenses figure leaves $200m gross profit, $140m after tax profit. $0.12 EPS, 7.5 PE at $0.90 SP, $0.08 dividends.
Assumptions: $11.80/lb nickel, $18/lb cobalt, 35,000 tonnes nickel, 2250 tonnes cobalt, expenses in line with your projection.
A reasonably optimistic scenario, but very acheivable - We only need production in line with management projections and prices in line with early 2011 prices.
MRE Price at posting:
89.5¢ Sentiment: Hold Disclosure: Held
