Nevada Copper Corp NEVDQ

RE:15 billion lbs- " my expectation"-

[thomsoni]

Hi Rockhound... I think it would be fair to say parts of the deposit(s) are still open, and there is a good possibility of adding reserves..No argument there. The deposit has "bluesky potential ". As for the potential to add more high grade resources, its probably pretty good as you say--but recognize it would likely take a lot of drilling (density) to move these resources to the measured and indicated reserves categories (ie move possibles to proven and probable reserves) Will it be a priority at this point? I doubt it but I don't know what management's intentions are at this point and how that would play out in their project timeline, and if there are capital constraints.(which I suspect they have as they have to finish the shaft and build a mill/concentrator) Reserves are important but potential cash flow is king. Personally, I am only concerned with what's in the current reserve report since that is what any potential buyer would look at. Nobody pays for "possibles"...although it helps to have some reserve upside as part of the story when the story gets pitched to management for funding. I don't know if there has been enough new drilling to do an updated estimate... Since most people will look at NPV, project timing is most important. The quicker you get to first ore/cashflow, the more value the project has. This is one reason why getting the landbill passed is so important. It speeds up the process by a couple of years. The one other thing that can make a big difference to the NPV is the discount rate employed. The lower the discount rate, the higher the NPV. The Caesar's Report of Oct 7th is probably a good example of the use of an unrealistically low 5% discount rate and a resulting overly optimistic NPV value. These days most analysts will use 8%. It should approach a company's average cost of capital.(although there can be some debate about this for sure) The price deck used is also important, and varies per analyst typically. They will usually start off at a conservative number--say $2.75/lb, and get their marketing guys to prepare a future price forecast based on stuff like supply and market demand for future years. Some I have seen do predict higher prices in 2015-16 time frame (see Kitco Cu forecast posted earlier for example). Most of the NPV of a project is often associated with the first 5 years or so of production with future years contributing less to overall value. When timing starts to firm up, an analyst often opts for a multiple expansion of NPV and this in turn yields a higher forecast price. I am expecting .8 when the land bill passes. What unknowns are whether they fund future capital requirements with equity or debt or a combination thereof. They will not want to issue more shares at todays prices, but perhaps at a higher share price, to avoid dilution...or at least minimize it. I don't believe this aspect is included in Nevada Coppers NPV calculation but I have not seen the detailed model. Assuming the land bill does pass---I suppose the last hurdle will be getting State mining permits. I don't anticipate any problems, but again it does add some uncertainty until the company has them in hand. Sorry for the wordy reply... thomsoni