This seems like a good, easily accessible place to post this for future reference:
Author: WillP -- Date:1999-07-17 17:45:54
Subject: Here's My Attempt
Diavik A-154 (north and south)
Blended value: $250 US per tonne
Revenue = $250 x 4500 TPD x 350 D = $400 million US.
Operating Cost: $40 X 4500 x 350 = $65 million US
Selling Cost: $40-million US.
Cash Flow: $295-million US
Tax & royalties @ 50% with first 50-million free = $115-million.
CF = $180-million US
Aber's CFPS = 0.4 x 1.5 x $180 / 50,000,000 = $2.16
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Snap Lake
Revenue: $200 x 2,500 TPD x 350 = $175-million US.
Operating cost: $55 x 2,500 x 350 = $48-million US.
Selling cost: $17-million.
Cash flow before tax: $110-million US.
Tax & royalties @ 50% with first 25 million free: $42.5-million.
CF after tax: $67.5-million US.
Winspear's CFPS = 67.5 x 0.68 x 1.5 / 50 = $1.37 Aber's CFPS = $0.64
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TOTALS
ABER: $2.80
WINSPEAR: $1.40
Winspear's target should be one half of Aber's. Considering they both threaten production in 2002, or earlier...they should rapidly approach that proportion. Aber has the lead, with the comprehensive study approaching finality, feasibility due shortly thereafte...yadda, yadda.
If Winspear seriously plans on beating them by a year...they'll be busy catching up over the next year.
Also...
If Winspear prevails....the proportion becomes:
Aber $2.50
Winspear $1.70
Now, thats a quick and dirty analysis, but it's done equally for both. Should serve as a starter.
Regards,
WillP
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