Kaunisvaara - value updateNEW BASE CASE DCF YE09 FOR KAUNISVAARA DUE TO INCREASED PRICE ESTIMATE:
USDm 546
Reference is made to my postings of DCF-estimates for Kaunisvaara. The below changes are made due to a 10 % increase in my long term price estimate for iron ore concentrate/pellet feed due to what seems as strong long term market fundamentals for iron ore. My new DCF YE09 estimate for Kaunisvaara is USDm 546.
* Long term real price assumptions:
- iron ore concentrate/pellet feed (average): USc 123/dmtu. This is equivalent to 10 % above the benchmark price in 2009 for LKAB sinter fines. It is assumed NAU and LKAB will achieve approx. the same FOB price.
- real price per tonne of iron ore concentrate/pellet feed: Iron content 69 % * USc 123 = USD 84,87 per tonne FOB port of Kemi
KAUNISVAARA I
* DCF YE09 before change: USDm 225
+ DCF YE09 of EBITDA-change: annual gross revenue prior to price increase USDm 386,4 * 10 % increase * (100 % – royalty to Sweden 0,2 %) * multiplicator 9,7 * discounting back from YE12 to YE09: 0,794 * (100 % - tax 26,3 %) = USDm 219
+ DCF YE09 of increase WorkCapEx: WorkCapEx prior to price increase DCF USDm - 29 * 10 % = - 3
= DCF YE09 after change: USDm 441
KAUNISVAARA II
* DCF YE09 before change: USDm 72
+ DCF YE09 of EBITDA-change: annual gross revenue prior to price increase USDm 386,4 * 10 % increase * (100 % – royalty to Sweden 0,2 %) * multiplicator 6,6 * discounting back from YE31 to YE09: 0,18 * (100 % - tax 26,3 %) = USDm 34
+ DCF YE09 of increase WorkCapEx: WorkCapEx prior to price increase DCF USDm - 5 * 10 % = - 1
= DCF YE09 after change: USDm 105
BASE CASE UNRISKED DCF YE 09 KAUNISVAARA I + II: 441 + 105 = USDm 546