WillP in my view Dr.Goldie is not that far off on his projection's.
His diamond price of $128 (U.S.) per carat in 2005 is not a projection and it is out of whack with the stated modelled values of De Beers, WWW and Mountain Province. That's an undeniable fact. His 5-per-cent increase per year beyond 2005 is a projection, and I also quibble with that, over a longer term.
Its you that have a closed mind and can not see the future and will only look at things using static figures.Why do I say this?Well first off you strike me as a reasonable man.
I assure you my mind is anything but closed.
A reasonable man knows that at a 7% compounded RR money doubles every 10 yrs.
Yes, it does.
Second we know the mine life of GK to be 20 yrs from construction to close.
Well, at 2.1 million tonnes per year, the 31-million-tonne resource would last 14.7 years. That's assuming all the Tuzo pipe is economic.
So lets say that the present value of GK for arguments sake is about C$5 billion.
You can say that. I will not. At $75 (U.S.) per carat, the entire 46 million carats are worth a gross value of $3.5-billion (U.S.), or about $4-billion Canadian.
4 to 5 more years permitting and construction =$7.5 billion First 5+5 yrs of production = $10 billion.Allowing for ten more yrs of mine life and depletion even though 7% increases during the next 10 yrs = $5 billion. $15 billion mined out of GK over 20 yrs sounds unreasonable?.
Is it unreasonable? Well, when is the last time in recorded history that diamond prices escalated by 5 per cent per year over a 15-year period of time, especially coming off a stretch where they jumped by 30 per cent in five years?
Furthermore, that rule-of-72 conspires against you in reverse. You need to deal with the NPV of Gahcho Kue, not the inflated gross revenues it might produce.
What is the long-term average increase in rough diamond prices?
Not to a reasonable man like Mr. Goldie. James
Apparently not. Nor to you, I presume.
Regards,
WillP |
