RE: EcconomicsRockbottom,
You say: "You want to make the issue about resource calculations but the real issue is ECCONOMICS.'
There is some truth, and some falsehood to this statement. That is a considerable improvement for you, is highly unusual for there to be a smidgen of truth to what you say.
I don't want to make the issue about LBE resource calculations. I have no issue with the resource calculations, or the reserve calculations. The issue I am making is that unlike your company of choice, LBE has released NI43-101 reports that include a conclusion on the Project Economics (they spell it different than you, but their first language is likely English) on each of the three Mines Liberty has successfully developed to date. The detailed studies, completed by independent professionals, support the fact that each mine is economically viable. Information is also available as to the the cash that will be contributed by these mines over the life of each mine. Information can be taken from these reports to support the fact that these mines are capable of providing the feedstock to operate the mill at current and future maximum capacity, through the life of the mines, as presently developed.
These reports, when combined, indicate a pre-tax cash flow that is significantly in excess of the debt, at the date that full capacity was reached. Based on these reports management has stated goals that indicate that debt and preferred shares can be eliminated within a relatively short period, without conversion options that would increase the 51% equity of Jilin Jien. The creditor, Jilin Jien, has publicly stated they support the program as outlined by management. When this is done, the 49% minority shares will have the same yield as Jilin Jien's interests in the company. The LBE supporters, myself included, believe that even with no further positive developments, this will warrant an increase in share value.
But there is potential for further positive developments. The project economics were based on $US7 with a 90 cent dollar, that's C$7.78 per pound. The current Ni price is equivalent to C$10 per pound, and this economic impact on the cash flow is significant. The Ni price could decrease, but it could also increase, that's the risk you take in any investment in a commodity based company. The protection that Liberty enjoys is that it is expected to be the low quartile of nickel producers, as to cost of production.
Another potential positive is extending the proven reserves and therefore the mine life of the existing properties. This is a very real potential, as the Hart deposit, which is presently indicated as the largest economically viable deposit in the Shaw Dome (over $80 million indicated cash flow), has potential to prove up considerably higher amounts as exploration and development continues. The other mines also have potential to extend reserves beyond the amounts covered in the NI43-101 reports. In addition to this, the company has a large land base and a number of prospective targets.
The thing that you got right rockbottom, except for spelling is the real issue is economics. And economics is what's in the NI43-101 reports of Liberty. And economics are involved in saying that the current Ni price that determines LBE revenues, at current capacity, is $2.22 per pound higher than the NI43-101 assumptions. Its economics that makes the risk/reward in LBE so attractive to the supporters that accept the integrity of management and Jien Jilin.
For the record, the real issue is economics in your company of choice, also. It was the fact that independent experts were unable to indicate ISM's major asset and mining property was economically viable, that was devastating and resulted in an 80% plunge in share capital year to date.