RE:RE:What now?Leadhead,
Projections for 2014 are to process and ship about 80,000 to 85,000 tons. At $2050 /ton (roughly the current lead price), that translates into about $165M to $175M in revenue.
Current expenses are tracking about $36M per quarter, or $144M per year.
Worst case, conceivably we're looking at income of about $20M for the year barring any material developments (like rain washing out the rail tracks again). So that's about 2 or 3 cents per share, even with the additional dilution about to occur.
Based on these numbers, a stock price of between 0.16 and 0.24 would seem to be in line.
If Ivernia can improve operational performance (lower costs and improve recovery rates), then we could be looking at another boost of $5M or more per year, adding 0.01 EPS.
The real upside is, of course, an improvement in the lead price. At 2200 the picture looks a whole lot better:
Lead price= 2200, Revenue=$176M, Income=$32M, EPS=0.04
Lead price=2300, Revenue=$185M, Income=$40M, EPS=0.05
Lead price=2400, Revenue=$192M, Income=$48M, EPS=0.06
Lead price=2600, Revenue=$208M, Income=$64M, EPS=0.08
So therefore, if you want the stock price to reach $0.50 or higher, better hope for a significant boost in lead prices. Without it, this stock will probably never be more than $0.25 to $0.30, especially with the debt overhang and additional dilution.
- Serge