RE: 2 pointsThanks for furthering the discussion on valuation. Every attempt increases the perspective. A few thoughts.
Assuming, as you have indicated, the market is more interested in projected earnings in valuation of share price, it seems to me that any prospective investors in IVW would be motivated by the 5 years projected production of better than 400,000 tons. Even though they also stated 60K production in the first year, an investor would be considering and AVERAGE of 80,000 production during the first five years, so may place a higher average value than the lesser initial years production plan.
Price: the price today on the metals market dropped from above 45 cents to 42+. Investors see a sustained trend of higher prices for lead, and inventories declining. Investors may consider that increasing demand from emerging nations for a staple consumer item, e.g. auto/vehicle batteries, as well as telecom backup systems, mobile power demands,etc, would increase.
Canadian exchange: since lead, as other industrial metals, is quoted at the exchange in US dollars, would not investors see a strong potential for appreciation in an asset that is denominated in a commodity based economy? This applies equally to Australia and Canada, but especially to Canada. I would encourage investors to
look at a chart of the Canadian dollar vs. the US dollar, and consider the Canadian economy, last month generated at + $8 billions in trade surplus, while the US had a negative %51 billions.
Any world investor would prefer to have monies invested in a currency that is based upon commodities versus paper assets, IMHO.
So, assuming a higher range for price of lead going forward, say a range of 45 to 55 cents over the next year(after all it was 13 cents a pound less than 2 years ago), and assuming a higher value for IVW base currencies, and the AVERAGE anticipated production, a higher valuation would be reasonable. IVW news release assumes $1000/ton, why not?
80000 tons average 5 year production/174 MM lbs.
50 cents/pound(average of 45-55)
60mm shares
20 cents cost of production
Cdn exchange 1.15 to 1.25 range in year 2005(conservative in my view)
49% deduction for Sentient,et al
20% for taxes
34 cents, with these facts and assumptions, in US$,or 40 cents CDN
That's what makes a market, LOL.
vocex1