RE:RE:What is BKM worth?There are obviously other factors, such as I am not sure that the provincial mineral tax of 13% on profits has been calculated into the model or not.
Breakeven Costs
The bottom line is that it appears that the breakeven requires approx $3.5 billion in ore revenue. Perhaps now 10 years later it is closer to $4 billion.
1.4 billion pounds x $1.60 per pound of copper x exchange rate at the time of 1.15 = $2.57 Billion copper revenue in Candadian dollars
868,000 oz of gold x $658/oz x 1.15 exchange rate = $657 million gold revenue in Canadian dollars
Moly 10 million pounds x $30 per pound??? x 1.15 exchange rate = $345 million moly revenue in Canadian dollar
Silver not included as the price was too low at the time
$2.57 billion copper + 657 million gold + $345 million moly = $3.572 billion
$3.572 Billion + Inflation = Approx $4 Billion in Revenue needed to Breakeven
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Revenue at today's ore prices
1.4 Billion pounds of copper x $4.18 USD/pound x exchange rate of 1.25 = $7.315 Billion copper revenue in Canadian dollars
868,000 oz of gold x $1731 oz x 1.25 exchange rate = $1.878 Billion million gold revenue in Canadian dollars
Moly 10 million pounds x $12 per pound x 1.25 exchange rate = $150 million moly revenue in Canadian dollars
Silver and rare earth metals, which have increased dramatically since 2010 =
$7.315 Billion copper + $1.878 Billion gold + $150 Million moly = $9.343 Billion + Silver and Rare Earth Minerals = Approx $9.5 to $10 Billion
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$9.5 - $10 Billion revenue less $4 Billion cost = $5.5 - $6 Billion in Net Income
If we discount $5.5 Billion over 20+ years we will get todays NPV (Net Present Value)
With a 5% return, this would make sense that the current NPV from the working model is approx $3.5 Billion or $170/share.
Note: This does not take into account Provincial mineral taxes, Provincial and Federal income taxes etc.
My guess is that copper prices will not go down long-term. Gold/silver and moly may or may not go down ... I don't know enough to even guess.
Using this simple revenue less cost model, it seems obvious to me at least, that the shares are way undervalued at this time. The big question of course is if and when the Provincial gov will issue the mining permit.