What is CHD worth?What is the right take out price for CHD? I have not seen any recent analyst views but my recollection was analysts were saying $1.10 per share on a going concern basis using long term copper of US$1.50, the published resource estimates, production in mid 2009, cost per pound of US $0.80 and a funded mine construction cost at $0.55 cents per share. I also recall one or two analysts who said that for each US$0.25per pound increase in the long term price of copper you could add $0.35 to the target price. So if one thinks the long term price of copper is US $2.50 CHD is worth $1.80. Add something to account for the fact that a capital raise ought to be done at over $1.00 per share and a higher resource estimate , one could probably add 0.25-.0.50 per share and get to over $2.00 before multiple expansion to peer average from 1x to 1.3x and any takeover premium. My guess is CHD could go for over $3.00 per share. Hopefully Lundin does nothing til the new resource estimate is done so that the analysts can come up with a new guess on what CHD is worth. Hopefully Lundin does not have such a hold on us that would disuade new bidders from paying fair value.
Just one point of view.
Coyote13