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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: Claude Cormier who wrote (24099)11/1/2006 4:25:24 PM
From: Mr. Aloha  Read Replies (1) of 78419
 
Agreed, though if you use a discount rate of 5% or higher, you can't have a large NPV with a 5% IRR. I ignore any NPV calculations using 0% or under a 5% discount rate.

Agreed also on the NPV/Market cap relation being key, assuming the project is a major portion of the company.

Also key in looking at these numbers is the assumptions used when calculating them, particularly the metals prices and discount rate used. If a company needs to use current metals prices and a low discount rate to show a positive NPV, that's not a good sign. If a company has a large NPV using ridiculously low metals prices and at least around an 8% discount rate, that's probably a winner.
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