RE:RE:RE:Q1: Is Moly removed from NPVStockcopper and Sooner,
I, too, have studied the moly situation, and think I have the answer to the "missing" moly in the NPV. With mining stocks and certain other industries that have co-products and/or by-products produced also, the terminology of "co-products" and "by-products" is important. With WRN, the co-products are Cu and Au, and the by-products are Ag and Moly (Mo). In the P&L statements and similar accounting statements such as NPV statements, the co-products are treated as income producers on the "profit" side of the P&L statement, but the by-products (in our case, Ag and Mo) only show up as a "credit" against the expenses on the "L" side of the P&L statement, usually hidden deep in the minutia of the costs and expenses of doing business. So, in our case, the income from Ag and Mo is used as a credit to decrease the expense side of the equation, and usually are not in a prominent part of the P&L statement where one can see the true benefit. If the expenses are, say, $1B, and the contribution of the by-products is $500Million, then that $500 Million is treated as a credit towards the expenses, making the expenses only $500 Million. Therefore, the contribution of the Mo is hidden in the small print on the expense side of the equation. The key to "rectifying" this is to consider the Mo as a co-product in the NPV, instead of just a bi-product. I used to work for a company that had this very situation, and we were finally successful in convincing upper management to make the switch of the bi-product to co-product status to give it more visibility in the P&L statements.In our situation with WRN, the moly contribution is not lost, but is just considered a by-product and shows up as a credit on the expenses.
Oakie 1