RE:RE:NPV for Verde SharesHello Mik,
Following the announcement by the Company of their intention to formally update the existing (2017) NI43-101 compliant pre-feasibility study filed with the regulators, I suspended the work I had been doing to duplicate the NPV calculation spreadsheets. I am therefore not able to run a "what if NPV" using a 2.5 million tonne per year profile extending beyond year 6, so cannot answer your question accurately.
Keep in mind the 25 million tonne per year in the later years of the existing study required significant capital investments, including building a railway spur line into Sao Gotardo. You will also appreciate that cash flows 35 years out discounted back to today at 8% don't add a lot to the current NPV (a net inflow of $14.69 in year 35 is worth only $1 today at an 8% discount rate). This means the NPV can be more heavily weighted by how the assumptions play out in the early years, rather than further those predicted to occur later.
I think it would be fair to say that with a 2.5 million tonne per year production cap, Verde will be generating cash flows from its Cerrado Verde deposit for the next 300 years.
Once the new pre-feasibility study is released I will resume my personal modelling and will have a tool with which to run alternative assumptions and forecasts. I will also use the 2020 audited results to constructed a near term valuation for Verde built of the reported actuals rather than a NPV from a proposed future.
Stay tuned, lots of great information and analysis still to come.