RE:Every 1 cent of copper price increase NCUI think its a sensible approach, but NCU has a large binary component right now.
15.5 cents is not an estimate of NCU's worth based on any sensible metric.
The market seems to be pricing in a 60% chance that NCU is worth ZERO, with a 40% chance NCU is worth 40 cents - Mathematical expectation of 16 cents per share.
So at $3.50 copper, on production news, as copper prices go up, not only does the intrinsic production value of NCU go up beyond 40 cents, as your method shows....the market will start decreasing the likelihood of failure, as high enough prices will cure errors, so at $3.70 copper, a 20% chance of ZERO, and 80% chance of 50 cents....Mathematical expectation of 40 cents per share.
So in addition to added "value upon success", higher copper prices quickly reduces the risk of zero to market participants, meaning turbocharged sensitivty over the three - six months.
IMO.