NORTHERN SUN MINING CORP LBEFF

RE: tdfxman - p/e-valuation

[loparn]

Thanks for the calculation. For a p/e-based rough valuation I use your 3rd scenario, where the Ni price assumption may be long term most relevant. Correcting for metric tons and fully diluted shares I would get : Annual nickel revenues of 12 x 40000 tons x 1.5 % x 90 % x 66 % Ni price = around USD 141.4 million. Operational costs is stated to be USD 12 x 2670800 = around USD 32.0 million. I assume cautiously USD 10 million additional overall costs. Earnings potential before taxes then would be around USD 99.4 million. After taxes, assumed long term to be 35 %, the net earnings would be around USD 64.6 million, or around CAD 1.12 per share. There should be at least 67 million fully diluted LBE shares now, which you can find if you study sedar files. Now with this probably rather realistic long term Nickel 15 USD/lb price assumption AND no valuation at all included for the cobalt business, I would say that a p/e-rratio of say 8 is rather reasonable or low, giving the LBE stock a very fine potential to around 9 CAD 2007 and maybe well beyond that later on. I think I will keep my LBE position