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Bullboard - Stock Discussion Forum Marimaca Copper Corp T.MARI

Alternate Symbol(s):  MARIF

Marimaca Copper Corp. is a Canada-based exploration and development company focused on base metal projects in Chile. The Company’s principal asset is the Marimaca Copper Project, located in the Antofagasta Region of northern Chile. The Marimaca Copper Project is situated at a low altitude in Chile’s Coastal Copper Belt, 25 kilometers (km) east of the port of Mejillones and 45 km north of... see more

TSX:MARI - Post Discussion

Marimaca Copper Corp > Quick numbers - US
View:
Post by Seahawks16 on Oct 02, 2024 12:48am

Quick numbers - US

To determine a fair sale value for a copper mine based on its return on investment (ROI), annual cash flows, and mine life, you can use a discounted cash flow (DCF) analysis. Here's a simplified approach to estimate the sale value based on the information provided:
 
### Given:
- Annual cash flow (after tax): $500,000,000
- ROI: 33%
- Mine life: 15 years
 
### Steps to Estimate Fair Sale Value:
 
1. Calculate Total Cash Flow Over Mine Life:
   - Total cash flow over 15 years = Annual cash flow × Mine life
   - Total cash flow = $500,000,000 × 15 = $7,500,000,000
 
2. Determine the Discount Rate:
   - The discount rate is often based on the required rate of return, which can be informed by the ROI. Since the ROI is given as 33%, it could be used as the discount rate for a rough estimate. However, in practice, the discount rate may also consider other factors such as market conditions and risk.
 
3. Calculate Present Value (PV) of Future Cash Flows:
   - The present value of future cash flows can be calculated using the formula for the present value of an annuity:
   [
   PV = C \times \left(1 - (1 + r)^{-n}\right) / r
   ]
   Where:
   - ( C ) = Annual cash flow ($500,000,000)
   - ( r ) = Discount rate (33% or 0.33)
   - ( n ) = Number of years (15)
 
   Plugging in the numbers:
   [
   PV = 500,000,000 \times \left(1 - (1 + 0.33)^{-15}\right) / 0.33
   ]
 
   Calculating this step-by-step:
   - ( (1 + 0.33)^{-15} = (1.33)^{-15} \approx 0.0405 )
   - ( 1 - 0.0405 \approx 0.9595 )
   - Now, calculate:
   [
   PV \approx 500,000,000 \times \left(0.9595 / 0.33\right) \approx 500,000,000 \times 2.91 \approx 1,455,000,000
   ]
 
### Conclusion:
Based on this simplified analysis, the estimated fair sale value of the copper mine, using a discount rate of 33% and considering a mine life of 15 years with an annual cash flow of $500 million, would be approximately $1.455 billion.
 
### Note:
This is a simplified calculation and does not take into account several important factors, such as:
- Potential fluctuations in copper prices
- Operational costs and changes in expenses
- Capital expenditures
- Regulatory and environmental considerations
- Market conditions and buyer negotiation dynamics
 
For a more accurate valuation, a detailed financial model and sensitivity analysis should be performed, often with the assistance of financial professionals or valuation experts.
Comment by Woodman601 on Oct 02, 2024 4:25pm
Well,if those figures are correct that puts the buyout share price at $19.00 canadian 
Comment by Woodman601 on Oct 02, 2024 4:26pm
And what if the price of copper keeps going up?
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