All the really matters: The Facts!Doingthejob or should I say Aatozz
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These are the Facts. As we move into the next few quarters, the market will decide where to price LBE.
From the McWatters Technical Report:
Life of Mine (2 Years) payable pounds is: 14,172,000 times .88 to get payable pounds from reserve 12,471.000. Ore from development to end of June was about 1,300,000 and guidance gives about 4,700,000 to balance in 2010 is 3,400,000 pounds. That means LBE will mine 7,800,000 pounds in 2011 having sublevel caving in full swing from January 1 and no development to do.
Since LBE are at $ 4.50 or so now as cost per pound and let’s assume average price of nickel to be $ 9.00. LBE should expect about 15 Million cash in the last half of 2010 (4.5 times 3.4 million) and in 2011 $ 34 million. This does not include $4-5 million that Redstone will make this year.
It is clear the debt is quite manageable and that the amount of the debt associated with the preferred shares that gets paid off, will be in the second half of 2011. If nickel is more than $ 9.00 on average over next year or if there is a few percent gain on Canadian/US exchange, all of the debt can be paid. If nickel is less than $ 9.00, less will be paid on the preferred shares.
Bringing on Hart will allow the revenue stream to continue, but will take about $ 7-8 million from 2011 cash flow which could delay full redemption of preferred shares into 2012. As far as I know, there is no time limit to redeem the shares.
Best
Nickel77