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Gold/Mining/Energy : Winspear Resources -- Ignore unavailable to you. Want to Upgrade?

To: maintenance who wrote (12449)	1/18/1999 8:51:00 AM
From: Cohiba	Read Replies (2) \| Respond to of 26850

Good morning Maintenance, ZDNPV = Zero Discount NPV Total Recoverable reserves X Cash Margin/ct = Gross Cash Flow Cash Margin = (Value/ct - Cash cost/ct - G&A/ct) Cash cost = Includes site costs for all mining, processing, administration and resource tax) Gross Cash Flow - Development Capital - Tax Paid - Debt + Working Capital + Other assets = Zero-Discount NPV Zero-Discount NPV / Shares issued = ZDNPV/share The MRDI study tells us that the Total Cash Flow from the project is 572.4 million for ten years with recoverable reserves of 3.5 million. The Total Cash Flow figure takes into account the Cash Costs (Operating Costs), the Development Capital (Total Capital Costs)and the taxes. WSP has no debt and I did not take into account the other assets. Basically, the Total Cash Flow provided by MRDI = ZDNPV So, 572,4 million X 68% = 389.2 million 389.2 / 48 million shares (fully diluted) = C$8/share For a 10 million reserves I simply multiplied this number by 3. Regards, Cohiba

To: maintenance who wrote (12449)	2/12/1999 8:17:00 PM
From: Letmebe Frank	Respond to of 26850

Regarding Share Price vs NPV: I would like to point out the following posts made on the Tromp thread, where Maintenance and Cohiba were working out the NPV for WSP using their set of assumptions. I'm trying to relate their discussion to what was in the Deutsche Bank report, which had calculated a conservative (my opinion) NPV of 17$. Given that WSP is in the exploration stage, should it trade at a premium to NPV or a discount? Has anyone got some history on how other resource stocks trade in relation to their NPV? It seems many people are saying the DB has a target of 17$, when in fact its a NPV, and a target price should be some multiple of it - higher or lower I don't know. Looking forward to your comments. (All comments except for WillP's Propellerheads!!) Message 7496512 To: +Cohiba (1928 ) From: +maintenance Tuesday, Jan 26 1999 5:03PM ET Reply #1932 of 1949 Payback 4.066351565 G%A 1500000 Tonnes/yr 1st 10 3285000 Tonnes/yr 10-17 6570000 Tax 45% Marketing 7% Diamet Share 29% Rate 10.00% Shares 32000000 Rev/tonne 91.56 Cost/tonne 1st 10 35 Cost/tonne 10-17 25 NPV/Share $11.50 I've been out of town for the last several day's, so here we have it. Pay back is Capital cost/ rev per year. I have used tonnes per year and $/tonne rather than carrots per year. If you multiply tonnes per year by grade of 1.09c/t you have 3500000. It works out the same. Cheers Message 7520642 To: +maintenance (1932 ) From: +Cohiba Wednesday, Jan 27 1999 7:56PM ET Reply #1934 of 1949 Hi Maintenance, Thanks for the calculations. They seem to confirm my point that the stock will trade at a premium to the NPV value. In Diamet case according to your figures (NPV 11.20) the stock is presently trading at a premium of about 57% (Can $16.95). This price is near the low of the year, the high being around Can $25 (premium would then be 120%). If I use your figures on WSP for a 10 million tons resource to be mined over 15 years at Can$ 400/t the stock would trade at around Can $11.25 using a 57 % premium and Can$15.85 with a 120% premium. Now, I believe it would be fair to discount the premium because WSP is still in the exploration stage. A 25% discount is suggested in the book I referred to in preceding posts. That would still give us a price between Can $8.45 to $Can 11.85. That is if we are using a 10 million tons resource only and I am still very confident that it will be at least double that. That only leaves us with the value per ton that may change in the next six months. Regards, Cohiba Subject: Trump's 12 Diamond Picks, Discussions Limited To: Cohiba From: maintenance Jan 27 1999 8:46PM EST Reply #1935 of 1949 Keep in mind that Aber is trading at a substantial discount to the NPV I calculated. Cheers