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Gold/Mining/Energy : Trump's 12 Diamond Picks, Discussions Limited -- Ignore unavailable to you. Want to Upgrade?

To: Tomato who wrote (1417)	10/21/1998 9:19:00 PM
From: maintenance	Respond to of 2251

You have it right, but I would use $6.32 for Winspear, $7.65 implies that they are starting production now. I Assumed a start date of Jan 1, 2003 for Aber. Winspear can not start production now, two years from now is probably too ambitious although that's where the $6.32 figure comes from. It is pretty safe to say we can attach some value to Aber with some degree of certainty. That is not true for Winspear. These NPV's are based on the assumption of certainty. There are thousands of factors we ignore by assuming certainty. For example in reality we don't know if the grade will hold up for Aber, and we don't know if Winspear will proceed to production. Who knows, governments can render an otherwise excellent project uneconomic by introducing stupid legislation on a whim. We can probably be confident in saying Aber has an economic resource. Winspear still has to prove that. For now Winspear is deriving it share price entirely from speculation. Furthermore if we accept the stated assumptions as fact, then the share price should trade around these net present values only if we accept the efficient markets theory. I for one certainly question the premises on which the theory is based. Cheers