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Gold/Mining/Energy : The Molybdenum Discussion Board -- Ignore unavailable to you. Want to Upgrade?

To: pogbull who wrote (1946)	4/24/2006 7:12:46 PM
From: HotnSpicy	Read Replies (4) \| Respond to of 3267

No, you misunderstand my question. I can easily do back of envelope calcs. I am aware they have the 21K tons of high grade material available. But they will eat up that in a few months. What I want to know is what's behind that? Are they able to access the lower grade material and get it to the mill? And if so, what sort of sustainable production rate can we use? And what are the economics of that? As far as I am concerned, 21,000 tons (15,000tons net) is a pittance. It's a nice jumpstart, but certainly not worth a market cap of $60+MM... 21,000 tons at 100 tpd is about 9 months production. If they get 5% MoS2, that's 1.5MM lbs x 60% (their JV share) = 900,000 lbs net. Say they mine lower grade 2% material for the remaining 3 months of the year. That's about 125,000 lbs net or just over 1MM total for the first full year at say $20 Moly sale price, that's $20,000,000 revenues. Roca will produce 1.5MM lbs of Moly in their first year or US$30MM at $20Moly. So GPXM will produce 33% less Moly than Roca in their first year yet they trade at ~50% higher market cap? In the second year, things look far worse as GPXM will only have lower grade material to process and production will fall to about 600,000 lbs while Roca can produce 1.5MM lbs of their higher grade material for about 4 years. And then they still have a mill running at 50% capacity so they can expand capacity as soon as they receive permits to mine additional quantities. GPXM is already trading at 3x next year's revenues and Roca is trading at 1.5x? And about 5.5x 2nd year revs vs 1.5x for Roca? Hmmmm. Perhaps I am missing something in my comparison?