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Gold/Mining/Energy : Copper Fox -- Ignore unavailable to you. Want to Upgrade?

To: dsikorsk who wrote (9065)	1/5/2015 3:38:38 PM
From: minder	3 Recommendations Recommended By dsikorsk Theotokos Zep70 Respond to of 10654

great point dsikorsk, recovery rates have a huge impact. you said: *"...this is just something else to add to the long list of things that don't add up..."* Agreed if you meant that almost all of management's actions don't add up but if you meant things don't add up within the context of explaining the diminished npv i would rather say that things are starting to add up when you consider all of the individual items we have discussed so far.. here is a thumbnail sketch of all the "multipliers" that factor into an npv calc, i count at least thirteen multipliers and a critically important discount rate: *(CURR = Copper Recovery Rate) NPV = n X KTPD X 365 X Exchange rate X ((($CU X CU/t X CURR + $AU X AU/t X AURR + $MO X MO/t X MORR + $AG X AG/t X AGRR), minus AnnualOpex) X #YrsMineLife, then discounted at x%), minus capex / #YrsToBuild, discounted at x% The only multiplier of those 13 that doesn't change is 365. As you can see with the long string of multipliers, only small increases or decrease in the majority of multipliers and you get drastically different end results, especially at lower discounting rates and currency exchange rates and higher recovery rates. during this discussion we have established that major contributing factors to the npv reduction are (and I may be forgetting some): -Recovery rates in the 2012 FS were brutally curtailed vs the PFS and vs CF's actual test run results (for reasons that have not been fully explained by the company). As you noted - this is huge. -Opex went up substantially (171 MT of waste removal and storage costs not to mention the loss of previously assumed revenue from this rock is likely a big smoking gun too). -Capex went up a bit also but understandable given inflation and the larger operation