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Gold/Mining/Energy : CORNUCOPIA RESOURCES CNP.t
CNP 39.00+0.3%Nov 6 3:59 PM EST
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To: SnakeInATuxedo who wrote (106)7/5/1997 3:37:00 PM
From: Steve Hegji   of 336
 
You are right - I was a little sloppy with my assumptions. Let's see if we can do a little better.

Assumptions:
1. They have forward sold 120,000 ounces over a five year period with an average price of $408 per ounce.

2. Their press releases expect the mine to produce about 50,000 ounces a year. Actually only 30K+ in 97 - ramping up thereafter.

3. What would they do with any gold in excess of the forward sales? Let's assume they sell it for whatever they can get for it.

Conclusions:
1. The mine will produce about 240,000 ounces over the next five years.
2. Half of that will be sold at $408 per ounce - $49M
3. The other half will be sold at prices that prevail. If we assume $340 as the minimum - $41M. Thus the minimum total is about $90M
4. Product costs, at $235 an ounce - $56M.
5. Net revenue over 5 years - $34M
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