Old Hamster calculations, $Cdn 95/tonne processing costs, and 3000 tpd:
3000tpd x ($300 cdn$/tonne revenue-95cdn$/tonne costs-$30 cdn$/tonne marketing costs) x 350 days x 68% - $20,000,000/year (principle payment&interest, misc business costs)= $104,950,000 per year before tax.
Divide by 120 million shares,.....CDN$0.87 earnings per share. Now for a multiple, well Diamet's multiple is around 10, so let's use it.
10* $.87 is $8.70 for a fully functioning diamond mine.
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Now if De Beers or BHP buy, they can fund the mine through loans and profits, so the question becomes, how much would one of these folks pay for $105 million per year in earnings before tax. The key is growth. If the resource can be accessed using several adits, and you can increase the 3000 tonnes per day to double, triple or more of that value,...the earnings do the same. What multiple of the earnings would you apply. A non-growth business would be 1 or 2 times annual earnings, but a growth business,.....
well my guess is 5 times (5 x $105 million = $525 million), so $525 million divide by the number of outstanding WSP shares which I think is about 61 million gives,...............$8.60 per share.
A second way to come at it, is to look at Dia Met's earnings generated at another great Canadian diamond mine, Ekati. Dia Met made about $75 million before taxes in their past year of production. That's pretty close to projected Winspear earnings by the hamster. So let's look at Dia Met's market cap. 33 million shares out times $20 today = $660 million divide by WSP 61 million shares gives $10.82 per share.
Looks like $10 ain't such a stretch after all (ggggggggggggg).
Might be fun to list our predictions for the buy-out price if it occurs. My guess is $8.50, but I'm hoping for over $10 |
