Taseko Mines Ltd T.TKO

What is 20% of Florence worth now?

[JCSunsfan]

With copper and 4.75 usd/lb and climbing.  There are some JV's that are kicking themselves they did not get in when they had a chance in January. 

Let's just use a round number.  $5/lb copper.  Florence is going to produce at $1/lb. So $4*80 million (or more if you believe NF).  That's $320 million per year free cash flow.  20% of that is $64 million per anum.  

From the website. Anyone care to adjust these numbers for $5 or $6 copper?  Basically take all these numbers and double them. 

• Pre-tax net present value of US$920 million at a 7.5% discount rate using US$3.00/lb copper
• Pre-tax internal rate of return of 44% with a 2.3 year payback
• After-tax net present value of US$680 million at a 7.5% discount rate using US$3.00/lb copper
• After-tax internal rate of return of 37% with a 2.5 year payback
• Operating cost of US$1.10 pound LME grade cathode copper
• Total life of mine production in excess of 1.7 billion pounds of copper
• Average annual production of 85 million pounds of copper for the life of mine
• 20 year mine life
• Total pre-production capital cost of US$200 million

[nofluff]

I believe stuart said they would use long term valuations of 3.50 copper. So npv would recalc at about 30% more or 1.25 billion.  So 250 million for 20%.  With steel price way up, plant cost will eat all the contingency fund. But sweep efficiency will mean much less initial well field costs. Since ymi and np r both years away from developement that cash could go into buying back bonds

[nofluff]

Currently tko trades bond and share price value of 1.5 billion cad. So a gib mine with only 300 million cad debt and producing a dollar eps should go at 25 times for 25.00 per share. With the other 200 million cad debt applied to flor and another dollar eps we have a 50.00 sp. So if a metals taker bought 50 million shares at an average of 5.00 and sp goes to 50.00, the taker makes 2.5 billion