STOCK CALL: MCR

Assumptions:

Nickel price for FY07 is avg of US$11.50 cf with US$6.43 - an approx 80% increase.

Production is 13500 t or 3350 t of nickel per quarter. 

Forecast Net profit is $45M compared to FY06 of $24M

45 000 000 / 195 000 000 = 23cps

June 2007 Price Targets

23 * 14.5 = $3.35
23 / 6.25 = $3.70


Update:

HY07 Profit came in at $37million.

Now one can expect at least another $30million for 2nd Half 07 - so total profit for the year is at least $60m at Ni prices of US$10/lb

13,000 tonnes x 2204 = 28,660,000 lb x US$10 = $286m REVENUE
Say 40% for all expenses out of Revenue (EBIT) Exl TAX
appox = $115m
AUD$286-$115=$150
AFTER TAX Profit;
$105m / 195m = 50cents a share = $7+ a share? LOL don't think so as the price of Ni will not be this high for FY08 and FY09 - remember a SP of a stock is its future earnings!

So lets say for FY08 that Ni prices come down to something like US$5/lb
and production is 10kt of Ni
10k x 2204 x 5 = $110million in revenue
Say from that profit is $40million AUD
40m/200m = 20cents a share
TARGET PRICE = $2.90 for FY08