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Gold/Mining/Energy : ASHTON MINING OF CANADA (ACA)
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To: Olec who wrote (4483)3/18/1998 9:05:00 AM
From: Jadrew   of 7966
 
Olec, Redo your NPV

Your statement that $ 1 billion over 25 years at 6% = PV of $48 million is incorrect.

If you are referring to $1 billion received in 25 years discounted at 6% the PV is $233 million.

If you are referring to $40 million/yr (total $ 1 billion) for 25 years discounted at 6% the PV is $511 million.

Note that both gold and diamond plays which are in production usually trade at a multiple of their PV (approx 1.5).

If you want to short juniors, go ahead. But, be aware that your payoff matrix is asymmetrical.
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