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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: aknahow who wrote (18154)	8/14/2006 3:13:35 AM
From: jackjc	Read Replies (1) \| Respond to of 78409

UBS and others have short term and long term estimates that represent industry thinking. A mine has to work for 10-15 yrs and long term prices will be used by banks for capex. The long term estimates have been slowly moving up. Have to use the banks estimates, as the feaseability is really a bank feaseability as it is their money. If a jr can do all equity, then it could be done by what investors are willing to believe.

To: aknahow who wrote (18154)	8/14/2006 2:36:34 PM
From: jpthoma1	Respond to of 78409

True that when the IRR was calculated actual prices may have been lower but my point is, is it normal practice to use base case price that are less than 50% of actual prices? In fact, since the company analysis is for a future project with future cash flows, it has to use future prices. We all know that metal prices are cyclical, so the company has to use cyclical future prices projections. And these projections are determined using different methods, but bankers and financiers really like those very conservative projections. So, if construction fot this project starts right now, first nickel concentrate may be shipped in 2010/2011. What will be the price at that time? Your guess is mine! JP