RE: BubbaBobBuxom
I hope this provides you with what you need.
| | | | | McWatters Cummlative Cashflow Totals |
| Can$ | LME Price | 2009 | 2010 | 2011 |
| /US$ | Ni | Cu | Co | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
| $1.00 | $7.00 | $3.00 | $19.00 | | | 7,048,430 | 13,058,305 | 15,213,650 | 15,547,738 | 17,502,931 | 17,870,461 |
| $1.05 | $7.80 | $3.15 | $19.50 | 667,353 | | 8,578,967 | 16,970,969 | 21,386,512 | 23,621,680 | 27,844,974 | 28,826,706 |
| $1.03 | $9.50 | $3.25 | $19.50 | | 3,466,499 | 10,765,687 | 22,561,101 | 30,205,852 | 35,157,148 | 42,620,943 | 44,480,202 |
| $1.00 | $10.00 | $3.50 | $19.50 | | | 11,128,642 | 23,488,960 | 31,669,700 | 37,071,823 | 45,073,481 | 47,078,394 |
| $1.00 | $11.00 | $3.50 | $19.50 | | | 12,471,943 | 26,922,974 | 37,087,413 | 44,158,051 | 54,150,346 | 56,694,322 |
| $1.00 | $11.39 | 0.33% | Pit | | | 1,516,675 | 4,185,460 | 1,943,517 | | | |
| $1.00 | $11.39 | 0.68% | SLC/BH | | | 4,176,620 | | 6,345,876 | 7,904,895 | 10,987,613 | 2,813,509 |
| $1.00 | $11.39 | 1.91% | CF | | | 3,983,799 | 11,310,928 | 2,866,897 | | | |
| $1.00 | $11.39 | $3.56 | $19.50 | | | 13,000,962 | 28,275,358 | 39,221,018 | 46,948,751 | 57,724,998 | 60,481,270 |
| $1.00 | $12.00 | $3.50 | $19.50 | | | 13,815,243 | 30,356,987 | 42,505,127 | 51,244,279 | 63,227,210 | 66,310,251 |
| $1.00 | $13.00 | $3.50 | $19.50 | | | 15,158,544 | 33,791,000 | 47,922,840 | 58,330,506 | 72,304,074 | 75,926,180 |
| $1.00 | $14.00 | $3.50 | $19.50 | | | 16,501,844 | 37,225,014 | 53,340,553 | 65,416,734 | 81,380,939 | 85,542,108 |
| $1.00 | $15.00 | $3.50 | $19.50 | | | 17,845,145 | 40,659,027 | 58,758,266 | 72,502,962 | 90,457,803 | 95,158,037 |
| | | | tpd: | 120 | 358 | 1,116 | 1,886 | 2,034 | 1,780 | 1,820 | 524 |
| | | Total Tonnes: | 10,800 | 32,200 | 104,904 | 169,774 | 183,022 | 160,200 | 163,800 | 47,200 |
| | | | | | 43,000 | 147,904 | 317,678 | 500,700 | 660,900 | 824,700 | 871,900 |
I’ve estimated the average Ni and Cu prices for the Q4 2009 and Q1 2010 and projected cumulative cash flow based on those estimates going forward. I haven’t tried to tie this into the YE financials.
Note that this is only the McWatters deposit so ore from the Redstone mine needs to be factored in and although they are planning on mining the McWatters deposit at these rates as per the SRK report not all of it will be going to the mill, some will be stock piled.
I’ve been lazy and haven’t gone through the most recent Redstone SRK report like I did with the McWatters report.
It’s beginning to look very promising as nickel prices are going in the same direction as our production.
Right now there are two things holding the share price down as everyone knows.
- The looming J.J. debt and preferred shares which are convertible into common shares at
.11. IMO there will be more than adequate cash flow to service the debt, which is all due by May 2011 in its entirety. The preferred shares have no time line and J.J. has publicly stated that they have no intention of converting them. So I see the preferred shares being retired at
.11 when it’s convenient for Liberty, but likely in 2011 and the sooner the better. And so far it doesn’t appear J.J. has been an inflexible creditor. - Having the Hart project fully permitted and work progressing towards an operating mine in early 2011. A fraction of the total $28M capital costs for the Hart mine are required to become operational and the mine should fund the costs needed to reach deeper into the deposit. IMO the reason for the delay encountered in obtaining the McWatters permits do not exist for the Hart mine.
If the price of nickel remains above $8 all is well, and above $10 it starts to become very exciting. And don’t forget about the PGM credits which will soon be accumulating in the company’s coffers.
On AG there has been a lot of nonsense about GN being quoted some where that Liberty’s cost per lb is $7.00. Anyone that has been paying any attention over the last 3 years knows that GN has stated that when we are at full production he expects operating costs to be as low as $3.00/lb. And don’t ask me to go find it in print somewhere. I don’t have the time do someone else’s DD, who clearly has some other agenda. Certainly, with low production and kinks to be worked out to achieve full production for the first time, we will have higher initial costs. GN has also made statements that the industry average costs are around $7.00/lb and therefore doesn’t see the price of nickel going much lower than this industry average cost. And that is a good thing for Liberty Mines, as we are a low cost producer of nickel. And yes, operating costs at a few hundred tones per day have been much closer to the industry average, but that’s soon to change.
BB