GREY:PGDIF - Post by User
Post by
lovecaratson Dec 12, 2017 4:10pm
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Post# 27141546
$5b NPV...huh??
$5b NPV...huh??racer-x must have some of that great BC Bud...or what??
Please name me ONE canadian mining company that has an NPV of $5billion??
You seem to confuse INSITU value with NPV but even from all the info out there right now it is virtually IMPOSSIBLE to show $5B INSITU value!
PGD's Nov 27 Investor Update presentation shows a project NPV, after tax, of CD$471Million!
HELLO
Anyone out there?
Lights on but nobody home??
Right now Chidliak project produces 11.6M ct
Let's say it doubles with the "wider" and deeper CH-6, which IMO, would be a huge stretch.
Now there would be 23.2M ct and even if you take the incredibly exaggerated US$178/ct value this results in INSITU VALUE of US$4.13B...or CD$5.16B.
Only through the magic of smoke and mirors can you generate $5B INSITU value - which is the furthest thing from $5B NPV!
Regarding the REAL value of Chiliak diamonds I refer you to Table 23.2 on page 23-3 in the 2016 PEA which clearly states the value of CH-6 to be US$149/ct while CH-7 is US$114/ct.
PGD's investor presentation compares Life of Mine (LOM) value of US$178/ct to CURRENT global value of US$109/ct. The average US$178/ct is a result of applying annual price escalation of 2.5% on top of inflation (2%?) from valuation point of Feb 2016. Clearly this is all smoke and mirrors folks but everyone seems to believe it.
MPVD's former CEO tried the same stuff: overstating value of Gahcho Kue to US$185/ct in his investor presentations and what has been the reality? US$70/ct
Similarly SWY forcast US$180-$190/ct and have delivered US$90/ct!!
The diamond business has not delivered much of anything since Ekati and Diavik, and possibly Victor.
Jericho (Tahera) was a sham, twice!; Renard (SWY) and Gahcho Kue (MPVD/DeBeers) have delivered horrible results to date and they will improve, but to original forecast? likely not.
The costs of developing and operating a small underground mine at Chidliak will be staggering and will continue to chew away at what is promoted as the highest margin ore (both SWY and MPVD previously tried to claim this and both are resounding failures so far).
You folks need to go back and have a close look at the current PEA because it makes little sense IMO and needs some major carat additions to even qualify for development.
The current plan produces 1.6M ct/yr for ONLY 5 years; Year 6 is only 1.0M ct while the tail-off of the mine is 0.6M ct/yr!! YIKES!!
To resolve this poor production profile an underground mine will need to be developed and in production by the end of Year 5 which means ALL the capital costs for the U/G mine will come from revenue in first 5 years.
Sure the forecast is for Pre-Tax Op CF to run @ CD$300/yr.
After tax is at best 2/3 or CD$200/yr.
All of this based on unrealistic diamond value from today's perspective, of course.
From this you'll be paying back the capital cost of development which, including underground mine, should easily top $600M, more likely higher.
It doesn't matter though because as cudjo has constantly pointed out, and I agree, the dilution required to proceed through Feasibility will be staggering let alone what would happen during Financing.
This is a nice little diamond pipe but it has been over-promoted, shades of Tahera/Jericho IMO.
That is why s/p is stalled my dear folks.
Wish the Christmas message would have been better...
Cheers.
LC