RE:RE:Still trying to work out a fair comparisonOops... sorry. I made a mistake. I sed 50 cents as an all in cost per pound fro KK copper but it turns out that that is your mine site cost and the "all in" cost is more like $1.00 to $1.10 or so
I will adjust this on the chart when I get a better picture of the risk discount to apply
N.
Notgnu wrote: | | IVN @ 40% | NCU @ 100% | |
| Long term average copper production per year (uses 500,000 tonnes production) | 440 million pounds | 290 million pounds | |
| $4.60 copper less all in cost per pound | $4.10 C/F | $2.60 C/F | |
| Long term avg annual free cash flow | $1.8 billion | $750 million | |
| IVN E/V X 85% for K.K. only | $8.5 billion | | |
| NCU E/V plus $1B to build the open pit | | $1.4 billion | |
| Cash flow factor 1:6 adjustment IVN to NCU | $1.4 billion | $1.4 billion | |
| DRC 30 year risk vs USA risk neg 30% | $980 million | $1.4 billion | |
| | | | |
| | | | |
| | | | |
Notgnu wrote: So far I have one repsonse that KK represtents 85% of IVN E/V ? Is this close?
My next question is to adjust for political risk of DRC vs USA for expropriation, warfare etc. What is a fair 30 year investment return risk factor?
- 0% to 10%
- 10% to 20%
- 20% to 30%
- 40% to 50% etc
My goal is to adjust for E/V (enterprise value); project pecentage ownership; risk adjustment; all in cost to produce copper; and then add in any other more minor variables (or major.)
So far, without risk adjustment and looking at long term cash-flow, they seem rather equal.
Cheers,
Notgnu