NPV #4 $530 million (PEA)

With the new information from recent press release, the following are details to an updated NPV calculation.

*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.*

NPV Calculation # 4 (Includes CH6 open pit and CH7 open pit only)
with updated information from July 2015

This will comparative to the PEA to be released in early 2016

Discounted at 5% = CAD$705 Million
Discounted at 7% = CAD$530 Million
Discounted at 10% = CAD$350 Million
Discount at  22% = Current valuation of company.
Discount at 33% = Breakeven

Tonnage:

CH-6

3.32 million down to 250 metres (open pit)
plus 1 million down to 250 metres (open pit) - Conversion estimate from July 2015 release
Total - 4.32 million tonnes

CH-7

6 million down to 250 metres (open pit) (no target estimate declared)
Let's estimate 5.68 million tonnes to make total tonnage nice and round.

Carat Value  CAD$250 per carat for all pipes (Will be updated after bulk sample)

Grades:

CH-6 - 2.58 cpt
CH-7 - assume 1.0 cpt on average for LOM.

Interview from Tom early in July indicated a 1 million carat per year operation. 
Mill target production - 500,000 tonnes per year.
300K from ch-6 and 200K from ch-7

Operating cost - CAD$75/tonne (open pit)
Total tonnage - 10 million - Mine life - 20 years

Year 1 to 14.4 - CH-6 open pit depleted @ 300K tonnes per year.
Year 1 to 14.4 - CH-7 open pit @ 200K tonnes per year
Year 14.4 to 20 - CH-7 open pit @ 500K tonnes per year.

Revenue by year:

1 to 14 - 243.5M per year
15 to 20 - 125M

Operating expense per year:

1 to 20 - $37.5 million

$150 million tax loss carry forward
Tax rate 40%
Royalty 2%

Capital cost

1 - $500 million (smaller mill - 500k tpa throughput)

year 1 = 243.5 - 500 - 37.5 = loss 294 million
(carry forward loss = 150 + 90 + 294 = 534 million

year 2 = 243.5-75 = 168.5 - royalty = 164 million - (tax on 164-164*.4 = 0) = $164 million
(carry forward loss = 534 - 164 = 370 million)

year 3 = 243.5 - 37.5 = $206 million - (tax on 206 - 206*0.4 = 0) = $206 million
(carry forward loss = 370 - 206 = $164 million)

year 4 = 243.5 - 37.5 = $206 million - (tax on 206 - 164 * 0.4 = $17 million = $189 million
(carry forward loss finished)

year 5 = 243.5 - 37.5 = $206 x 0.58 = $120 million
year 6 to 14 = $120 million
year 15 = 125 - 37.5 = 87.5 *0.58 = $50 million
year 15 to 20 = $50 million
year 21 = clean up cost $25 million

production year 1 = 2020

Exploration, bulk sample costs before then:

2016 15 million
2017 15 million
2018 30 million
2019 30 million