Dalian operation math DD
Resource figures- soma website docs show $1.6 million/month revenues, that R&D on minerals was based on 2004 prices. It is important to keep this in mind as metals prices have changed since then no?
Prices from kitco.com and are yearly averages.
Rhodium (2004- $903.71/oz) (2006- $4443.52/oz) 490 % increase!
Iridium (2004- $185.87/oz) (2006- $348.87/oz) approx 90% increase
Platinum (2004- $845.31/oz) (2006- $1142.31/oz) 48% increase
Gold (2004- $402.39/oz) (2006- $603.46/oz) 33% increase
For the purposes of this examination we will use the 2004 figures.
Assuming an eight month production season, if not add $484,000 for any extra operating months in the year, apparently they are working on a way to operate year round, we will see.
One production line
3 shifts/day, operating 24 hours /day produces
$1.6 mill/month revenues - $390k/month expenses =$1.21 mill/month profit
x 40 percent rev share =$484k/month for soma x 8 months =$3.87 mill/year for one line,
minus from that 40 percent of start up 320k=$128,000=
$3,744,000/8 month year take home for first year including start up, $3,874,000 for subsequent years.
Now considering we do not know time until tailings depletion, working out the end result, with a potential PE ratio is impossible. We will just have to wait for larry to give us those details.
So three lines equals $11,232,000/8 month year AT REDUCED 2004 PRICES for three lines, for first year, which, with again, no PE ratio.
Does this look right? If it does then consider if they get the thing working 12 months a year then we are looking at a 50% increase in minerals processed,
so $16,848,000/12 month year,
add avg minimum 33% increase in mineral prices gives with an assumed 24/7/365 operation profits of approx-
$22,407,840/12 month year at 2006 metals prices average, so revs actually double in this case.
Draw your own conclusions illusions and opinions
