RE:RE: KRN Actually advertising for CONSTRUCTION MANAGER!
TOTAL game changer, and all the lopsided negativity or little itty bitty childlike name calling will not change this. Either buy and hold or don't, time is running out for penny flippers and trash talkers. News should be coming any day now. PERIOD!! PS. For those interested in the FS details, only the first 30 years of mine lifetime were considered for the valuation. For taxation the model incorporates the royalty and mining taxes as described in section 22.2, further taxation has been implemented by HERGOTT company. only the first 30 years of mine lifetime were considered for the valuation. For taxation the model incorporates the royalty and mining taxes as described in section 22.2, further taxation has been implemented by HERGOTT company. Interest rate of risk-free bond (Govt. of Canada marketable bonds, avg. yield: +10 year, rate of 11 March 2010) 4.0% Project risk (sufficient data density, final Technical Report, Greenfield project) 6.0% Country risk Canada (low political or economic risk) 1.5% Project specific discount rate at 100% equity financing 11.5% Since a mining project is usually financed with a share of equity and debt financing of less than 30:70, the discount rate should be SLIGHTLY reduced. HENCE TAKEN INTO ACCOUNT. Capital (WACC). Here the WACC of the mining company itself or of a comparable company in the same industrial branch is used as discount rate. Both methods indicate that the discount rate for the DCFM should be between 10.1% and 11.5%. For the present valuation hence a discount rate of 11% is used. Since the premium for industrial-grade potassium chloride with a purity higher than 99% KCl depends on the end-use of the product and the actual purity, the product price of 400 CAD per tonne as used in the DCFM is based on the average price for MOP granular fob bulk Vancouver in the first quarter of 2010 (Fertilizer Week, 2010, /16/). A premium is not considered. I don't know if I have to explain all this, however as to my point the issue of financing has been addressed in the FS, and mining royalties which will actually be deffered have been charged, mine life which is grossly understated will be extended, product value due to higher quality premium had not been included robust contingencies included etc will all be net net highly positive to the IRR of KRN far above the actual stated in the overly conservative study.The project NPV at a discount rate of 11% after tax is 295 million CAD which means that the project will give a return. The IRR is 20.97% after tax. As such the project would even with significantly higher associated risks be economically viable. The ROI is 121% after tax which implies favorably high revenues and a payback period within the lifetime of the project. Indeed the cumulative cash flows of the project at the end of Year 7 are estimated at 42 million CAD resulting in a payback period of less than seven years of the total capital cost of 408.9 million CAD by positive cash flows from product sale only. This is a conservative estimate since the discount rate of 11% could be reduced as the project is situated in a low risk country, project conditions are well known; hence the reserve risk, which is usually the most decisive risk for a mineral project, is comparably low such as the mining, process, construction and environmental risks (Mular et. al., 2002, /28/); the product price of 400 CAD per tonne final product is based on MOP prices and does not consider a premium for the higher KCl content in KARNALYTE‟s product, AND none of this factors in the HIGHER BRINE temps. THIS IS WHY THEY ARE ADVERTISING FOR A CONSTRUCTION MANAGER right now while some try and spout negative drivel. All have all been factored in including a natural gas price baseline of 6.13 CAD/mmBTU. All this and trading .50 per share below cash in the bank with one of the smallest floats I have ever seen. When this starts to run all the blabber and name calling in the world won't be able to stop the huge GAP UPS! All just my opinion, good luck to all.