LBN Share of Mineral Tax is Over $200 MILLIONMineral tax is 13% of net Income. LBN are to receive approx. 1/3 of this revenue based on negotiations with the provincial government.
Using the "Working Model" that Pacific Booker used in the past, it shows $6.233 BILLION in net income when current ore prices are used, and other variables such as the current US/Canada exchange rates are used. See the calculation and variables below.
13% of $6.233 Billion is $810 million
1/3 of $810 million is $270 MILLION, which would be LBN's share!
I am concerned that the provincial government will not use the real numbers and instead be very conservative. That said, when negotiating, LBN needs to know, what is in it for them.
From my calculations, when Pacific Booker projected the mineral tax in the past, they too were very conservative and used a net income of approx $1.6 Billion, as the mineral tax came out to approx $207 million.
LBN's share would have been approximately $70 million based on the final revenue split negotiated with the provincial government. At the time Pacific Booker used very low historical mineral prices.
However, what is really scary, is that the Clark, Coleman and the Liberal government manipulated the figures and showed that the expected mineral tax would be just over $60 million. It's been years, and so I do not recall the exact number, however I believe it was $63 to $68 million. This would mean that LBN would only recieve just approx. $22 million with a 1/3 share.
Pacific Booker found/obtained the files, which were "hidden" behind the name "Booker Pacific" and not Pacific Booker. The question is why would the Liberals manipulate to such a large extent? My understanding, and I am not a lawyer, is that the provincial government were "obliged" to give more attention to projects that resulted in $100 million or more in mineral tax. This seems like fraudulent behavior to me.
The issue is what number will the NDP use when negotiating with LBN?
Will it be $22 Million? ... Liberal estimate
Will it be $70 Million?... BKM conservative estimate
Will it be $270 Million? ... current estimate
$270 Million is more than a dozen times the Liberal estimate of $22 Million
Someone please share this with LBN, as they need to know the truth about WHAT IS IN IT FOR THEM.
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When BKM calculated $1.6 Billion profit, they used the following numbers:
Copper price $2.75 pound ... it is now $4.16 pound
Gold price $658 oz .... it is now $1780 oz
Silver price ? ...it is now $26.10 oz
Canadian $ to US $ of 87 cents ... it is now 80 cents
Very conservative ore recovery rates:
Copper 84% ... More likely 90%
Gold 56% ... More likely 74%
Silver 56% ... More likely 74%
We cannot predict ore prices in the future and so I understand a conservative approach. That said, most analysts and reports that I have read, feel very strong that copper demand will outstrip supply. Thus, copper prices are likely to remain highand may go even higher.