$8 BILLION in ore ... how cu/au price effects value of BKM$8 billion is a lot of money to add to the economy. That money circulating has an even greater economic impact in BC!
It seems illogical to me to deny a safe copper mine, especially when copper is needed to reduce carbon emissions and transition to a greener economy.
How mineral prices impact the NPV or Net Present Value of BKM
For every 10 cent change in copper price there is a $178 million change in revenue ... 1.37 billion pounds x 10 cents x 1.3 exchange = $178 Million
For every $100 change in gold price there is a $85 million change in revenue ... 658,090 oz x $100 x 1.3 exchange = $85 million
The impact on BKM value of mineral prices using the working model
with 90% copper recovery and 74% gold and silver recovery
Note: The cap rate is decreasing in many countries. In parts of Europe the national bonds pay less than 1%
In the original working model they used 8%, however now 5% and even 3% cap rates are considered reasonable. My guess is that if BKM is sold they will use 5% or less to determine the NPV
Copper is the main driver.
for every 10 cent increase in the copper price, the NPV increases by approx $105 million at 5% and $130 million at 3%
For every $100 increase in the gold price, the NPV increases by approx $62 million at 5% and $76 million at 3%.
NPV at 5% is $2.8 Billion and at 3% it is $3.5 Billion
This shows how important mineral prices are to our valuation. My guess is that copper demand and therefore price will be strong going forward.
The BKM valuation from years ago was only $495 million. They used an 87 cent dollar, copper price of $2.75, and a gold price of $658, which is more than $1000 oz less than it is today.
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How I got to $8 billion in ore:
1.37 billion pounds of copper at $3.45 x 1.30 Exchange rate = $6.1 Billion
658,090 oz of gold at $1775 x 1.3 Exchange rate = $1.52 Billion
$6.1 billion copper plus $1.5 billion in gold = $7.6 billion
add in the moly and silver and it is approx. $8 billion