Hi gemsearcher,...is it safe to come out now (gggg).
Hamster calculations for SAf diamond mining for your comments.
1. I don't see how SUF can realistically get $1 EPS out of known Klip reserves; while I have not done the math , at 50 cpht/say $100 per carat it would have to attain very high production rates to get there. That having been said , I would be happy with 50 - 70 cents.
Assumptions:
Shares out: 27 million (after buyback)
Shared overhead per year (assume Messina goes ahead): $1 million
Diamond valuation: US$100/carat
Diamond grade after dilution: 0.5 carats per tonne
Costs per tonne, after production tweaking: US$25 per tonne
Calculate number of tonnes to process (before taxes): X
X * (US$100/carat*.5 carat/tonne- US$25 per tonne cost)/.68 ($CDN/$US) - CDN$1,000,000 = $27,000,000 (EPS)
X = 761,600 tonnes/yr throughput
761,600tonnes/yr /( 365 days * 5.5/7)(correction for down days) = 2660 tonnes per day, or 111 tonnes per hour(24 hour day)
We have 60 tonne per day(Klipspringer) now. Marsfontein gives us the other 40. Another 50 tonne per hour plant would more than pay the taxes. Alternately, the 100 tonne per day plant could be commited to Klipspringer once M1 is mined out. De Beers may or may not continue with the program, and if they decline, the big plant is 100% SUF.
Having proved the $1.00 Earnings per share after taxes is possible from diamonds alone,...and assuming we can keep a minimum 5 times multiple,..shareprice should be $5.00. The problem, as you and many of us has pointed out, is the propensity for present SUF management to throw all their cashflow at numerous far-flung exploration projects around the globe. There is a time to gamble, and I time to dig in and concentrate on production, and build up a war chest to gamble another day.
Hamster calculations are subject to squishing by a certain threadster (gggggggg). |
