Citi analysis - July 2011 Some members have been speculating on NPV as of late, here is some data from reputable source.
Cline Mining (TSE:CMK) The company is currently developing the New Elk Coal Mine, located in Las Animas County in Colorado, and has commenced production of high quality metallurgical coking coal. The economics of developing and operating New Elk are very compelling. Assuming a gross coal price of US$168 per metric tonne, transport and handling charges of $46 per tonne, and operating costs of $51 per tonne, allows the operator to claim a cash margin of $71 per tonne.
This translates into an eye watering Internal Rate of Return of 98.65% and a Net Present Value of US$1.04 billion at a 10% discount. The Project is highly geared to any movement in coal prices, with the Internal Rate of Return soaring to 152.16%, and Net Present Value to US$1.51 billion, with coal at US$200 per tonne.