Numbers (FY16 accounts based)16 Nov 2017 23:37
Been feeling the fear lately so I've done a bit of work...
Underlying EPS $0.40 or �0.31
2016 revenues were $766m net of pre commercial revenue and $969m gross (page 15) so I think its ok to add 8p to underlying EPS giving �0.39 (�0.31x969/766)
2016 Production was 140,000 tonnes Cu Cathode equivalent (page 23) = 69% of revenue (page 17) and the 2016 average LME Cu Sales price was $4,860 per tonne (page 18). So I think had LME Cu prices averaged $6,860 and had the tax rate been 20% or 30% the extra EPS generated would have been �0.38 or �0.33 (production x change in price x (100% - tax rate) / 446.8 million shares)
Maintenance spend in 2016 was $640 per tonne of copper cathode (or equivalent) produced (page 23) and fully ramped up, Kaz is expected to produce 300,000 tonnes of copper (cathode equivalent?) per year. So I think at an average price of $6,860 per tonne this would generate extra EPS of �0.29 + �0.44 or �0.26 + �0.44 (change in production x maintenance spend adjusted change in price x (100% - tax rate) / 446.8 million shares) plus (2016 underlying EPS adjusted to �0.39 x 160,000/140,000)
So in summary of the above I think a fully ramped up Kaz with Cu averaging $6,860 per tonne will generate earnings per share of �1.50 or �1.42
Sensitivity analysis gives the following (fully ramped up) EPS values for various average Cu prices�
$6,000 per tonne $2.72 per lb �1.15 or �1.11 puzzled by tax rate seeming insignificant ??
$6,250 per tonne $2.84 per lb �1.25 or �1.20
$6,500 per tonne $2.95 per lb �1.36 or �1.29
$6,750 per tonne $3.06 per lb �1.46 or �1.38
$7,000 per tonne $3.18 per lb �1.56 or �1.47
$7,250 per tonne $3.29 per lb �1.66 or �1.56
$7,500 per tonne $3.40 per lb �1.77 or �1.65
$10,000 per tonne $4.54 per lb �2.79 or �2.54 !!!
I think these are seriously nice numbers, but it is easy for analysis of this nature to be materially wrong due to modelling errors.
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