RE: RE: RE: Exploration vs. MiningThanks for your reply. Nice catch on the NI43-101 mix-up.
You can't have a mine without a feasibility study and Jien will own 75% when the mine starts. That's what matters isn't it? So 50% is just a means to an end. When the revenue comes in it will be a 75-25 split after expenses.
The shares that Jilin Jein and GBK each have in Jien Canada are documented in their contract. You may not like it but it is what it is. Ownership of a company is determined by how many shares you have. GBK owns 1.966% of the outstanding shares.
However, you are right about the NI43-101 mix-up, but your calculations don't make sense. You can never recover 100% of any mineral. Their expectation was 82% in Raglan, so to be realistic we should use that figure. Mining, refining and overhead of a hard rock mine can't be done for $40. Just getting the ore out of the ground is probably $40. $80 is more realistic for all operations and overhead involved. Don't forget that the numbers in the NI43-101 we are referring to is 6 years old and a profitable mine isn't for another 2-3 years. Prices go up.
Total Indicated resources for Nickel: 22,000,000 tons
Total cost for extraction and processing: $1,760,000,000
Available Nickel: .93% X 22 million tons = 204,600 tons
Recoverable Nickel: 82% X 64620 = 167,800 tons
Life of mine based on 1 million tons/year: 22 years
Net pure Nickel mined per year: 8390 tons
Conservative Nickel gross calculation: $10/lb X 16.78 million lb (8390 tons) = $167.8 million / year
Cost for extraction, processing, overhead per year: $1,760,000,000 ÷ 22= $80 million
Net profit per year of operation for the Nickel component: 167.8 - 80 = $87.8 million
GBK is entitled to 2% of that approximate $87.8 million : $1.75 million
GBK has about 180 million shares OS. That Nickel resource adds .01 per share earnings.
Better than I previously stated, but don't forget that GBK has to first overcome an operating loss of .03 per share.
If all the other minerals cover the cost of processing, then their revenue would be .018 /share.
However, recalculating the the Raglan deal at 25% instead of 2% gives another .015/share plus the value of all the other minerals I didn't calculate.
The thing is, none of this has actually happened. The price of GBK should rise nicely to the .50 range if they manage to squeeze another .02 -.03 it out of Raglan. That is a long way off. Higher prices won't hold until these events actually happen for real. A lot of things can happen between now and then, and the current price reflects that. When the hype subsides, the market usually gets it right.
That's my take FWIW. It's just an estimate based on the facts at hand, but there is always more than meets the eye when it comes to penny stocks. I wish you all luck.