Chidliak NPV Calculation #1 - CAD$750 million

Looking at CH6 only above 250 metres

*Information in this current blog is based on information obtained up to mid 2018 and should be considered legacy at this time and should no longer be relied upon.*

Inputs:
Inferred - 3.3 million tonnes
TFFE - 1.83 to 2.01 million tonnes - pick middle - 1.92 million tonnes
Grade - 2.58 cpt
Capital Cost - $500 million (back of the envelope)
Operating cost - $75 per tonne

Assumptions:
Process 500K tonnes per year
Valuation per carat - CAD$250/carat
Tonnage - 5 million tonnes available

Discount 7%
Tax rate - 40%
$150 million carried forward tax loss (already on books)

Output:
Mine life 10 years

Starting in 2020.

profit by year
2016 - minus $10 million (exploration)
2017 - minus $10 million (exploration)
2018 - minus $50 million (site preparations)
2019 - minus $100 million (Long lead items)
2020 - minus $350 million (construction phase)
2021 - positive $325 million minus operating costs $37.5 million minus $50 million in adjusted taxes = $237.5 million
2022 to 2030 = $237.5 million / year

Undiscounted NPV (after taxes) - CAD$1.855 Billion
Discounted to 2015 @ 7% = CAD$804 million
After 2% royalty = CAD$750 million

Sensitivity on Discount factor
@35% discount - NPV - 0 (Breakeven).
@26% discount - NPV - $55 million (current market value)

Market is currently valuing PGD at 23% discount at Chidliak. (assuming just 1 open pit - CH-6)

Assuming market still values PGD at 23% in the future, this is the future NPV as the years get closer to production:

Break even @ 35% Market cap @26% SWY 2007 Loan Rate SWY 2014 Loan #1 SWY 2014 Loan #2 26% 12% 7.5% 6.25% 2015 - january  55 million 400 million 705 million 827 million 2016 - January 70 million 450 million 760 million 880 million 2017 -january 90 million 500 million 815 million 935 million 2018 - january 118 million 563 million 878 million 995 million 2019 - january 163 million 640 million 950 million 1.06 billion 2020 - january 241 million 733 million 1.03 billion 1.14 billion
Theoretically the Discount rate should move toward the financing rate that the construction loan has. I've listed 3 instances of Stornoway loans from the past.
As you can see, The SWY loan in 2007 that is 10 years before production is at 12%. In my calculations, I estimate Chidliak 5 years before production. That is a significant conservative discount factor for Chidliak.