Great Bear Resources Ltd. GTBAF

Net Present Value

[lechmeir]

A net present value formula has a discount rate that represents the value of money over time.

You may get ten percent of the value of gold that you're going to extract in the 8 years, but it's a stretch to suggest you're gioing to get 10 percent of the value for what you're going to extract in the subsequent 40 years.

Something like this...

[surething1111]

Lechmeir, Tell that one to evolution mining. This type of analysis might make it on a moderate grade base metal scenario, but margins in the gold space right now, particularly high grade and relatively low costs blow that model right out the window. Forget the 8 year time frame, long term profitability will rule the argument for some time to come, after all gold is the ultimate hedge against

[lechmeir]

Sure thing - I'm not sure what you mean, or what you think I said.   However, the subject of net present value (NPV) was brought up.  It has a specific meaning.  Basically, the ounce of gold you dig up today is worth x, while the ounce of gold you expect to dig up twenty years from now is worth x minus a discount based on the rate of return you would have expected from

[surething1111]

My apologies Lechmeir I may have misspoken. I am aware that you have been an avid GBR for a long time, and sometimes a little rational thought is a good thing, especially when tempered against my irrational exhuberance. ;-) Thanks S

[Ivorygull]

Thanks lechmeir, I learn something new everyday. All I can say is Battle North got more than 10%, unless I completly got the math wrong.

[lechmeir]

Ivorygull.  We're likely to get a premium on size too.  Large companies will like the surety of a long term project. In all things they will look at the risk free rate of return (US 10 year bonds areca general proxy for that), how much they need to late out... how much they stand to make... And they'll sharpen their pencils accordingly.

[Ivorygull]

All good stuff to learn and get to know..........thanks again. And yes, I'm sure who ever does take us over will have the guys with the sharpest pencils. Had visions of the movie Men in Black with them holding pencils LOL