Have to take issue with some of your remarks, Olec!
You state:
Remember to analyze both best and worst case scenarios and don't forget to discount future revenue to obtain present value ie $1,000,000,000 over 25 years @ 6% rate of interest is $49,994,190 today.
What you say is true, but the figures you provide are overstated; mining will result in multiple cash flows over the expected life of the mine, and not an immediate realization of the resource. Your analysis would be correct if ACA were only able to "instantly" recover all the diamonds 25 years from now. The NAV, therefore, would tend to be much higher than you've indicated. I think you're use of 6% as a "discount rate" versus "rate of interest" is probably right on or close to, however.
Besides, the current market cap on ACA is not pegged in any way on an asset valuation. At current, the resource they've found is promising but of zero value. The "value" attached to it by the market is all speculation or anticipation.
Also, you explain:
k14 is marginal at best and k91 is just to small baring some spectacular diamond counts
Really? A bankable feasibility studies cost millions, and anticipates hundreds of variables before making a conclusion (including the time value of money); If such a determination can be quickly discerned on the back of a matchbook cover I guess that money is squandered. |
