What the FS doesnt include-to arrive at NPV of 2.8 billion1. a reasonable discount rate assumption (10% is too high after permits are received-it should drop to 5% thereafter-that would increase NPV all else being equal to approx. 1.7 billion!!!-thats a 70% increase just on discount rate assumption!)
2. Large diamonds-average diamond value increases to approx. $175/ct. . We know the sensitivities to diamond prices via the FS study. Suffice to say, using the high model diamond values the increase in NPV is 746MM-in other words the new NPV would be 1.75Billion.
3. Mine Life-current mine life is estimated to be 12 years. This doesnt include any extensions to Hearne, 5034, or Tuzo from 533 ft - 750 ft (underground Tuzo). Nor does it include Tesla. As PE states, mine life could extend another 8-13 years beyond base case. Whats that worth? Not sure, as monies further out are worth less than monies earlier recived, but still, its probably worth another few hundred million at least-say 300MM (probably conservative). Plus, ireading btw. the lines, longer mine life increases the odds of receiving permits as the trae offs between length of employment fopr native dwellers and damage to environment from mine become much more favorable (thats reality).
So, if you ad this up, and we assume diamond prices do not escalalte any more than than the 1.5% assumptions already assumed in the FS, then we get an additonal value of 1.8 Billion. That would put the NPV value at 2.8 billion-or, almost 3 times the current NPV.