james,
Here are some numbers for you to chew on....why would anyone sell anywhere near Thursdays close with what we now know????
Author: teevee -- Date:1999-07-18 08:27:14
Subject: A NEW NAV
actual grade? Once the size curve is finally plotted, the value for EACH stone over 1 carat will likely be averaged for the particular size range, and attributed to the overall average value per carat....for example, if we assume one stone of exceptional quality helped bring the 200 or so tonnes from pit#1 & 2 up to say about $343 per tonne, this actually adds about $11.00 per tonne implied value.....the curve will also predict the expected frequency of larger crystals up to 100 carats in size.....for example, say one 100 carat crystal is expected every 150,000 carats and the crystal is worth $15,000 per carat...that would add $10 per tonne to the average implied value per tonne.....so, I agree with Willp that once everything is all said and done, the calculated grade (and mining grade)will be higher than the average of Pit# 1-4 and comfortably over $US200.00/tonne.....
What would someone pay for WSP at this time? Ultimately the main factor will be the IRR that the CFO says they want....other factors will be what is the upper limit on the scale of operations(tonnes per day)....life of reserves, discount rate, capital costs, operating costs etc.....I noticed in the notes to Table #3 in the Deutsche Bank Securities-Albino report, in calculating the NAV, he increased operating costs by 35% and used 14.5 million tonnes.....also he increased the capex by 50% on a 3000 tonne per day mill.....so lets now increase the tonnage by 25% to about 18 million tonnes(this is the "global tonnage" over two meters thick AND averaging 2.7 meters thick), decrease capex by 50% and decrease the operating cost by 35% to get in line with MRDI numbers (given MRDI's experience as lead engineering group on the construction of the BHP/DMM Ekati diamond mine, I think their numbers should be acceptable) so what to we now get for a NAV with an 8% discount rate assuming production in 2005? and a CFO who wants a minimum of a 23% IRR????....($Cdn4.93)(1.25 tonnage increase)(1.5 decrease in capex)(1.35 decrease in operating costs)=$Cdn12.50/share-a number RT et al and the brokerage community should be able to defend.....this discounts the "blue sky tonnage of the cone sheet to zero net present value......
regards, teevee
PS: MPV? they haven't yet announced average value per carat-I hope you don't get a surprise like at Tahera....also, the last release with the statement that "a decision as to whether (or not) to proceed with a feasibility study is expected this fall" what kind of Pump and Dump horse shit is that? also, are they going to drain the lake the samll pipes are in? as they are spread out, will a dam around the pipes cost $250 million or more like at diavik? what will an extra$250 million on the capex and time delay do to the economics? Will the numbers reach DeBeers high IRR threshhold? too many questions with likely negative answere at this time for me to consider owning MPV...besides, the liquidity is terrible...I hope you don't own too much of it:-))
|
