RE:RE:RE:RE:Three for ThreeI know it too!
ursusbrumae wrote: Fine Bloom. If you want to split hairs, that's after tax. But the metal basket is $155 in the FS, while market is $138. So your margin of $52 must be cut down by $17 to $35, yielding a net margin after tax and capital of 35/138 = 25%. Undiscounted is meaningless. Time is money. You are putting a billion and a half in the ground over many years just to get this up and running. 4-5 years from now maybe, then you start paying back debt. Then, a few years after that, you start earning. The last dollar in your undiscounted cash flow is 24 years after the first dollar, 29 years after the start of construction following a huge capital raise, and 50 years after the stakes were driven on this land. IRR is 14.2%. And this doesn't account for the negative gearing of paying 100% of the capital for 64% of profits. Also, NI 43-101 numbers are always better than the actual operations. Why is that? I don't know. Miners' heavy boots. You insist on rolling out your numbers and correcting me on every fine detail. Very well, I respect the attention to detail. But you miss my point entirely. In investing, if you need a spreadsheet, it ain't worth it. You are mining too close to the cutoff grade. This is why you wait till the market balances or moves to deficit (with low stockpiles) and price rallies. Then you get cheap capital and healthy margins. Well you don't need a sharp pencil to figure out that Kakula is going to make gobs of money in any conceiveable copper price environment. And yet you are almost assured of a favourable copper price. Robert knows it, Ivan knows it, Jinghe knows it, Joe knows it, and everybody in the world who knows copper mining knows it. That's why they're all in a Mexican standoff, all sweaty and twitchy-eyed as in a Sergio Leone film, to see who blinks first.