Adding to what you were saying about production costs at one of PFN's meetings they were estimating it would cost them about $10 a ton.The value of their rock at that time was about $40 dollars a ton.
Production would be very cheap if this turns out to be an open pit mine.Inco and Falconbridge have already built the infastructure.
Now it's quite a leap to a 100,000,000 ton from 10,000,000 and that's assuming they have 10,000,000.
However let's say for arguments sake they had 100,000,000 tons. If the average value was $40 a ton and production costs were $10, the gross profit excluding capital costs and the rate of recovery would be about $3 billion.
Now if they have 100,000,000 tons be assured they will only be left with 35% of this project.That would mean their end would be worth $1,005,000,000.Now of course they will have to do more financing between now and then.So if we said at that time they would have 25 million shares (I think that is generous)gross value per share would be around $40.
Now the real question would be how much would another company pay for $1 billion dollar profit earned over a number of years?
Now af course there are many factors that are unknown.Higher grades,Price of PGEs just to name a few.
When you look at North American Palladium's market Cap and then look at PFN's it seems to me PFN isn't cheap for this stage of the game.
Only continued drilling will tell us. |
