RE: RE: RE: RE: RE: RE: SND's Potential return on SND management estimates 21 million lb's of copper production, we have a 24.5% interest, call it 25%, that is ~5 million lb's net to us, copper is at $3.60, I think we get $3.60 - $0.80 = $2.80 which is about $14 million.
TBD has drilled I believe about 20 wells and is due to drill 30 more. 20 wells x $2.00 net back per mcf x 450 mcf x 350 operating days x 35% interest = $2 million
That brings us to $16 million forecasted cash flow based on these numbers
SND management has ALWAYS issued conservative numbers. IF you go into the Donner technical report for Bracemac (which I have) we s hould be expecting slighlty higher than 21 million lb's, maybe up to 22-23. With TBD, we are curently making about $2.25, and we have a ton of leverage once we drill up 50 wells. If nat gas goes up $0.25 at 50 wells, that equates to about $700,000 per $0.25. So if we go from $2.00 to $3.00 we are now up $2.8 million.
NDX was supposed to be in freaking production but well Nolan flushed $37 million down the toilet at this point. If it was in production, it would earn $10 million x 8% = $800,000 on the promissory note plus 600,000 tpa x $4.50 royalty = $2.4 million
So from these THREE streams we go, Donner $14 million (conservative, and i am assuming full production), TBD ~$2 million (based on 20 wells but I believe they are drilling up to 50), plus NDX income of ~$3.2 million. so we hit $19 million. then we call G+A $2 million and get knocked down to $17.
then you take into consideration random BS that always happens, and i call the range $15 - $17. but with lucky production or higher grades on donner it could be $20 million plus.
but as i previously alluded to, NDX is bust, so yank out $3 million.
So a fair range i would expect us to earn, NET of G+A, pure cash flow, is $12 to $14. and this is rock bottom, imho. because SND management is being conservative, we are using rock bottom natural gas prices and ignoring more wells being drilled, and giving no value to NDX.
if we get 1.4% copper or higher on Donners mine, TBD gets 50 wells drilled, we could break $20 million cash flow.
ive read the technical reports for all these companies, and this is what i am basing my numbers off of.
yes i base my cash flow numbers on GOING FORWARD cash flow at a specific point in time. TBD is already in production, donner is forecasted in q1 per donner management, q2 per SND management. q1 is almost done so we should expect a production announcement decision anytime. so yes, a fair way to look at it is, mid 2013, we should be earning $12 - $14 million in the worst, worst, worst case scenario.
the only thing that could screw this all up is donner's mine breaking. every 1/30 mines or so seems to break. that said, xstrata is the operator, so i would HOPE that it is a pretty remote chance.
if donner breaks, this thing is worth maybe $0.10 / share. if donner functions properly, we're worth $0.75.
the CSI stream has the potential to be very lucrative. assuming no buyback, it could pay anywhere from $5 to $10 million. so we are looking at a potential huge increase in cash flow 2 years from now.
lastly, NDX has the potential at spot prices to probably earn $5-$10 million minimum. PERSONALLY, i would be OK with nolan throwing $10 million into NDX. we would own a company, which i think is awful, but the fact is, no financing deal is done, which seems to suggest a deal ain't coming. if we can get this thing cash flow $5-$10 million for 40+ years by throwing in $10 million more, I am OK with that. but this has to be a sure thing. so if this did happen, i'd hope nolan is 100% sure we are capable of this.
little buzzed, sorry for the nonsensical response, tried to answer as best i could
peace