Dennis, you are finally using a calculator, I may disagree with you assumptions, but let say you are correct, they need to process 328,000 tons per day, not just move it but leach it precipitate it and traet the tailings (so you need to rpocess really 656,000 tons per day. They are planning on a 10,000 ton per day facility not 328,000.
You should correct your figures for the fact that they will own only 70% of the property and need to pay out 40% in taxes before they disburse dividends, I will not even hold you to a capital budget for that huge capacity (this equipment probably does not survive much more than five years in the harsh environment it will be put to use)
Second point that you correctly pointed out is that is that they will need to market, not just the 30,000,000 ounces (about 1000 tons or 50% of current word production), but if you still want 50 dollars in dividend your number will be well north of 80 million ounces per year which is more than current world production. Of course, if they get to 10% of world production, the imbalance will force gold down under 300 $/ounce and they will make no profits. I am not even arguing the point that by then you will have to have some 40 to 50 million shares, since money to put together a 300,000 ton/day mining and extraction facility does not grows on trees.
The typical cost for a 10,000 ton per day floatation facility (much cheaper than what is contamplated for extracting the gold from those sands) is $40 MM and the equipment required to move the same 10,000 tons per day cost $17 MM. So even at these very conservative numbers you require at least $74 MM (you need to move these ores twice once into the plant and then to the tailings site), this without the leaching and precipitation and filtering equipment. I would say that assuming another 10 million shares is conservative, and just for 10,000 tons per day.
Now you see why numbers like 500 $/share are sheer ridicule, and the fact that people like C.L., Currie and Mazarella and others that have a lot of weight on this thread should quelch these ridiculous numbers. The fact that they are silent in the face of such rampant hyping should be questioned by righteous people like you. Their silence in the face of such hype is their acquiescence with it.
Zeev |
