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

To: jackjc who wrote (48303)	8/29/2007 10:33:14 AM
From: tyc:>	Read Replies (1) \| Respond to of 78430

>>"You may be right...." I'd much rather hear why I'm wrong, as I probably am . I gather that the mine will cost C$207M, and that investment would yield a before-tax return of 26%, even at metal prices lower than current prices. Doesn't that mean that the company would get its $207M back plus a return of 26% per annum over the life of the mine, from which it would have to repay the debt and debt charges and tax? The residue (only) accrues to equity ownership which would have a market cap of ~ C$250M after financing. That's no big deal in itself, but probably that would not be the end of the story. The locality is mineral rich. Quoting from the News Report: "The Wardrop OFS indicates an attractive 26.3 per cent pre-tax rate of return and a payback of 3.0 years, using moderate metal prices of US$1.07/lb ZINC, US$1.85/lb copper, US$0.52/lb lead, US$9.48/oz silver and US$526/oz gold and US-CAD exchange rate of 0.855. Current prices and near term forward prices are significantly higher than these price assumptions and provide an attractive environment for building of the Wolverine mine. The January 2007 OFS estimated project capital cost at C$207.6 million including contingency of C$24.4 million and owner's costs of C$7.6 million. The total capital requirement is estimated at approximately US$250 million including working capital, financing fees, debt service during construction and an additional US$25 million for funding of potential over-run in costs". EOQ