RE: 150 million tonnes SP estimateI posted this a while ago as a conservative valuation of NAG...you can review and make the adjustments to reflect more up-to-date resource prices.
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Can someone comment on the simple valuation below, which is based on the original Louise Lake tests:
Copper:
*Zone = 50,000,000 tonnes = 100,000,000,000 pounds
*0.3% copper = 100,000,000,000 x 0.003 = 300,000,000 pounds copper
*300,000,000 pounds copper @ $1.30/lb = $390,000,000
*Probability of confirming reserves: 30%
*Value of copper: $117,000,000
*Recovery costs: 70%
*Value of recovered find: $35,100,000
Gold:
*Zone = 50,000,000 tonnes
*.3g/t gold = 15,000,000 g Au
*15,000,000 g Au = 529,109 oz Au
*529,109 oz Au @ $500/oz = $264,554,500
*Probability of confirming reserves: 30%
*Value of Au: $76,366,350
*Recovery costs: 70%
*Value of recovered find: $23,809,905
Total expected recovered value of Cu and Au finds: $58,909,905
Assuming a 10 year mining program to capture this value, with equal cash flows each year, cash flows beginning in the second year, and a 15% discount rate, the NPV of the flows is:
$25,709,146.34
with 41,173,161 shares issued, the value per share of Louise Lake should be about: ($25,709,146.34 / 41,173,161) = $0.62
This does not include any of the expansion of the zone that NAG is working on now, nor does it value other minerals that they are finding aside from Au and Cu. Therefore, if we assume that these factors might bump the find value by 20%, then we should have an addition $0.12 in value, pushing the share value to $0.74 cents.
Adding some speculative value in for the Whiskey Gap property, a valuation of $1 or more should not be far off.
Any investment bankers on here or former mining execs want to add to or comment on my model? I'd appreciate any feedback on appropriate assumptions in such valuations that would help make my models more realistic.