Offer is too low Just going by an old report, this offer is TOO LOW.
The project has an NPV of $850 million assuming metal prices of US $6/lb. nickel, US $1.50/lb. copper, US $900/oz. platinum, and US $200/oz. palladium. The project has a NI 43-101 compliant indicated resource estimate of 21.3 million tonnes with a feasibility report, based on a previous and much smaller resource estimate that indicated a mine life of at least 8.5 years with the processing of over a million tonnes/year. Information from Canadian Royalties indicates a total known resource within its mineral tenures which may be over 30 million tonnes which, if available for processing, suggests a potential operating life of 30 years.
element assumed spot premium
Ni 6.00 9.25 1.54
Cu 1.50 3.75 2.50
Pt 900 1531 1.70
Pd 200 677 3.39
money printing and asian economic expansion will continue... these spot prices probably higher when the mine starts operation.
850 NPV --> at least 50% premium --> 1275 NPV
30Mt possible over 21.3Mt estimate --> 40% additional material --> say 20% additional material LOWER BOUND --> 1530 NPV
25% of the project
$383 M
Now, what do we have?
~ $100 M take out, or 26% of the LOWER bound value.
Take out should be at least 40% of NPV, or 153 M.
That is 80 cents, MINIMUM. GIVEN THAT JJ WANTED TO SHAFT US IN ARBITRATION, I THINK THE LATEST OFFER IS AN INSULT!