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Gold/Mining/Energy : Winspear Diaminds (Bulls Board) -- Ignore unavailable to you. Want to Upgrade?

To: Letmebe Frank who wrote (587)	2/18/1999 7:48:00 PM
From: russet	Read Replies (1) \| Respond to of 1172

Hi again Letmebe Frank: The problem is which NPV to use. Right now you have from $2.50 per share to over $36.00. Know which one is right? Everyone needs to make assumptions on price of diamonds, hundreds of different costs, along with the variables associated just with Winspears resource. No one will get them all right or probably any right. That's why they use a range. Deutsche Bank uses a huge range from $3.70 to $17.35, all based on premature, non statistically significant, diamond grade and value data. Relying on NPV's at this stage is like playing Russian Roulette. Gotta just bet with your guts. If you think they got more big chunkers, and diamonds spread evenly all over the place, and lots of tonnes of dykes all around Snap Lake, then your guts are full of Bullchit and you shouldn't give up any of your shares for less than $25.00, and then only a few. If you think they have few big chunkers, diamonds spread unevenly, and few dykes, then your guts are full of Bearchit and you are on the wrong thread....-gg- russett, big Winspear Bull

To: Letmebe Frank who wrote (587)	2/18/1999 8:40:00 PM
From: maintenance	Read Replies (1) \| Respond to of 1172

I don't agree that time value analysis is useless or that every analyst will have different results. In fact different analysts results tend to be very much in line. Other than that I strongly agree with Russett's comments: Message 7893172 To directly answer your question, is there a relation such as a multiple comparing NPV to share price, the short answer is no. At this stage I use and post NPV to use as a guide to whether or not the numbers reported make sense. In Winspear's case they do. At this stage of exploration I would say there is really no relation between NPV and share price. I think the belief of the market is that Winspear has likely found more than 10 million tons, not so sure of grade, and is quite skeptical of values holding up. These factors are determining the price. When the bulk sample shows a grade, I and many others will calculate a new NPV and if the NPV is high enough I would expect the share price to trade above the NPV/share. The factor will be related to how great an NPV we calculate. If the NPV is relatively high, the multiple will also be high. Conversely if the NPV is low the multiple will be low. If the NPV is very low then the shares would trade at a discount. If the NPV is zero or less it means that the deposit is not economic. The reason for the premium will be blue sky potential. The market will know that if they prove X tons that means at least X tons, not X tons but no more than X tons. At this stage it is really a prove it scenario. The one thing I really like about NPV is that it forces you to consider all factors and make your evaluation objective. Yes we use assumptions, we have to because there are unknowns. If you read about an NPV and don't know the assumptions, it is useless. If your see the assumptions and don't think they are reasonable, disregard the NPV. For example if you see that a discount rate of 50% is used or costs are estimated at zero, then you know the calculation is foolish. If the assumptions are reasonable the so is the NPV. Cheers