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Gold/Mining/Energy : Winspear Resources
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To: maintenance who wrote (12449)1/18/1999 8:51:00 AM
From: Cohiba  Read Replies (2) of 26850
 
Good morning Maintenance,

ZDNPV = Zero Discount NPV

Total Recoverable reserves X Cash Margin*/ct = Gross Cash Flow
* Cash Margin = (Value/ct - Cash cost**/ct - G&A/ct)
**Cash cost = Includes site costs for all mining, processing, administration and resource tax)

Gross Cash Flow - Development Capital - Tax Paid - Debt + Working Capital + Other assets = Zero-Discount NPV

Zero-Discount NPV / Shares issued = ZDNPV/share

The MRDI study tells us that the Total Cash Flow from the project is 572.4 million for ten years with recoverable reserves of 3.5 million. The Total Cash Flow figure takes into account the Cash Costs (Operating Costs), the Development Capital (Total Capital Costs)and the taxes. WSP has no debt and I did not take into account the other assets.

Basically, the Total Cash Flow provided by MRDI = ZDNPV

So, 572,4 million X 68% = 389.2 million
389.2 / 48 million shares (fully diluted) = C$8/share

For a 10 million reserves I simply multiplied this number by 3.

Regards,

Cohiba
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