RE: Canman20???evergreene:
canman did a great job and worked with what info was available and his evaluations are in line with other efforts that have been posted on this board deom time to time in the last year or more on this topic. His numbers are as good as DCF analysis can get given what is known and what assumptions are being made.
Why don't you give it a shot, burn some midnight oil, crunch some numbers and let's see what you come up with.
As you know (and as we all know), what a buyer will pay depends on how hot the market is and how optimistic/pessimistic his view of the future is. The buyer, especially the corporate buyer, will evaluate what is (i.e. his base case of what he sees as mineable reserves) and build his offer on this. Just how much more he will want to pay for blue sky potential over and above the base case gets done at the negotiating table and that is anybody's guess. He may pay 10 cents on the dollar or he may pay 30 cents on dollar for the upside potential. There is no doubt that he will not pay any more than he absolutely has to. That is what buyers do in a free market. And the sellers, to put it in your language, think their miled out rust bucket should sell for top dollar with no miles, no depreciation, no deductions for scratches, dints and broken windshield, no deductions for eventual repairs, etc.
Sure,as an owner of MPV stock (and MPV is far from being a rust bucket), I want as much as I can get at the time I want to/have to sell it.
One thing to note and that is DB's purchase of Snap Lake from Winspear and Aber gives us some idea how much they will pay give or take a little depending on market conditions. I think they paid somewhere in the neighbourhood of $10/carat in the ground. So, if anybody thinks DB is going to pay $75 - $100/carat, you had better enrol in business school and learn how to do DCF Analysis of projects or failing that, at least take a course in Corporate Finance and learn to appreciate the concept.
Cheers,
LB