James,
Sudhir in his Q & A session, stated that he is comfortable with 20 million tonnes as he is only interested in what can be mined in the first 10 years. Well, that equates to about 5500 tonnes per day production rate. If we assume margins of $CDN400/per tonne, and debt financing of their 68% working interest, on a pre tax basis, this is a cash flow of about $1.5 million per day. After tax and debt repayment, say 500,000.00 per day or an after tax annual cash flow of about $3.75 per share ($48 million shares out). Using your long bond rate of 5%, we should be looking at $75.00 per share as a target price when in production, given the above assumptions. All bets are off, if Sudhirs projection of even higher grades for the bulk sample comes true.
regards,
teevee
What if Winspear really gives DeBeers a head ache and builds incrimentally, a second, third and fourth 5500 tonne per day mine (Maybe there could be more headframes at Snap Lake than around Timmins!!!eh EC?)on the north shore, east and south side of the cone sheet? Maybe DeBeers would have to come to Winspear and ask on their knees to arrange a quota for their inferior second rate goods. With such a cornucopia of the largest and whitest gem dimaond, all the cutters and buyers could easily defect from the CSO and thumb their nose at CSO threats of banishment from sites. |
