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Gold/Mining/Energy : Zentek Ltd - ZEN
ZEN.V 1.190-1.7%Jan 16 9:30 AM EST
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To: Glorieux who wrote (2878)9/3/2013 11:13:54 AM
From: Claude Cormier2 Recommendations

Recommended By
jpthoma1
LoneClone

  Read Replies (2) of 22856
 
Glorieux,

You do not calculate the NAV base on the size of the deposit but rather on the annual throughput over a reasonable period of time.

When a gold deposit, the size of the deposit and the process determine the annual throughput, because the market is unlimited for gold. When an industrial metal, there is a third component that helps determine the throughput: the market size...because, unlike gold, it can be limited. That market size must be established.

As far as the NAV is concerned, It doesn't help a lot to have 40 years of resources instead of 20 years. The discounting mechanism makes the cash flows from year 15 to 40 much less rewarding.

Revenus and costs are used in the NAV calculation.

So, in my opinion, the most important factors for the PEA and the NAV are in order:

1- market size and sales price
2- costs
3- deposit size.
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