NPV 8% for 6+6 Mining ScenarioIf you increase throuput by 50% from 8 Mtpa to 12 Mtpa in the Nov 2016 PEA:
NPV 8 = $6.364 billion USD
That's up 34% from an 8 Mtpa mining scenario.
It works out to $4.14 share CAD (0.79 USD), assuming IVN buys out Crystal River, and gains 40.4% of the project, instead of the current 39.6%.
This also assumes construction costs remain the same as the 8 Mtpa mine. They'll certainly go up, but since we can't know by how much, I left it as is.
Life of Mine drops from 29 years to 17, plus four years construction. Undiscounted cash flow stays the same at $17.114 billion. So, by creating different models, easy to do with a phone app, you arrive at various NPV values. Everything over $17.114 billion undiscounted cash flow is due to expansion of the high grade portion of the resource and/or cost savings through improved economy of scale. A 25% increase in ore corresponds to approximately $21.39 billion. And a 50% increase $25.7 billion undiscounted cash flow. Everything else is simply scenario modelling. This gives us an idea of what to look for in the12 Mtpa mining scenario of the upcoming resource update.
There are 15 drill rigs operating on the project. This resource update should reveal if the company is finding more ore grade resource, or simply piling on low to moderate grade statistics that don't meet head grade requirements. If the later is the case, then drilling has reached the limits of high grade expansion, and is now focused on upgrading resource to indicated and measured for the PFS and feasibility study to follow. A 25% increase or better in undiscounted cash flow would be a very favourable for investors.