RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Very SimpleLonghandStrong wrote:
your math is good however it doesn't consider opportunity cost and the time value of money. These are very much considered by investors on this scale. Next best opportunity IRR NPV and risk adjusted cost of capital. You can do a lot of damage with $24BB, and have to consider time, return versus risk profile and other. Gross proceeds, less Capex needs discounted by the cost of that capital, your math has missed that last part.
Longhandstrong - I agree this needs to be considered. The last workup I did showed a good NPV and IRR result. I used a $1B investment to build out the mine, 17 year mine life at 400,000 oz. Au per year (no other minerals) from the open pit only - total of 6.8 million oz. Au produced life-of-mine, just the highest grade 50% of the ore. I took the first five years of development up front for the $1 B investment with no revenue during that time. IRR was just over 20% and when it went too low in year 18 due to cost inflation (I figured 10% annually) I shut down the mine.