Western Copper and Gold Corp T.WRN

USD

[jclarke042]

Important to convert everything to USD for our friends on this side of the border. This'll help keep things consistent, and let anyone still trying to justify a >$3 billion buyout know, it's time to step those mental gymnastics up a notch.

As the NR states, everything is in CAD unless is says US$ specifically. I converted from the NR, using .8 conversion rate.

The following table summarizes the financial results:

	Base Case
Copper (US$/lb)	3.35
Molybdenum (US$/lb)	12.00
Gold (US$/oz)	1,600
Silver (US$/oz)	24.00
Exchange Rate (C$:US$)	0.80
NPV pre-tax (5% discount, US$millions)	4,632
NPV pre-tax (8% discount, US$millions)	2,896
IRR pre-tax (100% equity)	23.3%
NPV after-tax (5% discount, US$millions)	3,120
NPV after-tax (8% discount, US$millions)	1,864
IRR after-tax (100% equity)	19.5%
LOM pre-tax free cash flow (US$millions)	10,400
LOM after-tax free cash flow (US$millions)	7,256
Payback period (years)	3.0
Net Smelter Return (US$/t milled)	22.51
Copper Cash Cost* (US$/lb)	(1.13)

Silver lining for me is CAPEX comes in at US$2.6 Billion, not materially more than US$2.45B as in the 2013 FS.

[Sooner]

What would IRR be if Rio paid $1B for Casino equity? What would it be if they paid $2B? If it takes IRR down below their 15% return on invested capital...then that might be very important financial metric goal for Rio.

[jclarke042]

I don't know Sooner, I haven't talked to Rio about their internal decision making process in a while.

[Sooner]

rough calc - current 20% IRR if they were to increase "cost" to include $1B WRN equity purchase, i believe that would take IRR down to 16% or so. Include $2B WRN equity purchase i believe would take it down to around 12%. If i'm in Rio's shoes....I show that simple math and say, "hey, we are not willing to comprise going below 15% (or whatever their threshold is)).  So

[nmpappy78]

Sooner: I will try ONE more time.  Do you really think that Dale would sell WRN for less money than he sold Penaquito in 2006 when it had 2 million ounces of gold and it was at $800 per ounce?  And zero copper!!  That is an insult to Dale's intelligence.....

[Sooner]

calm down pappy - i'm on your side ....just try to take a more conservative approach --- Didn't Pensaquito have a boatload of silver? Was Pensquatio resource fully vetted out? What was the M&A environment like in 2006 vs today? Lots of variables. Dale stated a long time ago that he viewed Casino along the same lines from a quality standpoint as Pensquatito so I agree it will be

[nmpappy78]

Keep spinning WRN on the low side, and you can expect the share price to stay there.  Don't complain about it at the same time.  This is a winner and the story must be positive.  Don't try to compare Penaquito gold (and maybe silver) prices to WRN's gold and sky-rocketing copper prices.  The future is not gold and silver, but especially in copper and gold. 

[MetalMinded]

I for one believe in it, so much so that I added to my position again today, dollar cost averaging up.  It sure feels like spring building up pressure to pop up to me and it has so much long (actually mid) term potential. 

[Sooner]

pappy - c'mon - even if my commentary was able to influence the price of WRN (which sorry to say none of us are influencing the price in any meaningful way in my opinion), but my "low ball" prediction is a triple in 4-5 months! I'm not sure what world you live in...but most people would call that crazy talk on the upside!!!! Who's complaining??? Quite the contrary , I'm

[cb2task]

This post has been removed in accordance with Community Policy

[nmpappy78]

Oh, Sooner!  You just don't get it!  If Dale sells WRN for $6 per share, he would be giving away his life time dream for $900,000!!  His BOD would go crazy!!  And, so will I..... 

[metalhead666]

You and Dale don't decide what someone else is going to offer.  You can wish for a pony and a river of beer but it doesn't mean you're going to get it. RIO decides not you or Dale.

[GardenManman]

WRN have $50M in the bank, if Rio can't meet the fair price tag, just let them go, WRN can survive very well and invite new partner, underground metal never go. You just put Rio and WRN at different level in negotiation. if you are right, Rio is the deal controller, why they provide millions money but they can't get one position in the board? On this deal, each side is equal, all depend on

[metalhead666]

No, the sides are not equal...if RIO goes home they're out a few bucks but WRN is toast.  You think this is by invitation? LOL  Where are the other buyers all these years?

[GardenManman]

Rio paid money and get 8% share, it should be first large single shareholder, and Rio do not get any director position but much restrictions on their shares. if not equal, why Rio accepted these unequal restrictions ?

[nmpappy78]

Dale DOES decide!  He does not have to sell to Rio or anyone else if he doesn't like their offer.  He still owns WRN which will no doubt increase in value every year he holds it!

[metalhead666]

If Dale doesn't make a deal this stock goes into the pennies. It is totally valueless without a buyer and I'm quite sure RIO knows this too.  Doesn't matter if his entire family dug the hole by hand over 10 generations...it is ONLY worth what someone else is willing to pay for it. And NO ONE is going to pay $20 or 10x the current share price as determined by the entire market.

[Heywood_Silvers]

What you or the market "believe" WRN is worth is irrelevant.  You got a seat at the negotiating table?  Didn't think so.  The BoD and RIO will negotiate a package deal that is fair and acceptable to all parties invovled. The market can go pound dirt for all I care.  I'll take advantage of any price inefficiencies the market may offer, but otherwise what WRN

[nmpappy78]

THANK YOU, Heywood!!

[Sooner]

One man all by himself with like 5% ownership decides what happens with the other 95%. Seems kind of strange. I'm not saying he is doing anything wrong, but odd how one person seems to be the only decision maker? I highly doubt that ...and suspect it's more than just Dale at this point . 

[nmpappy78]

You are right.  He is not the sole decision-maker, but the BOD certainly has collective intelligence that far outweighs any of us on this bullboard!

[Sooner]

Great - since I'm the only one who thinks $6 usd is reasonable target...and everyone else thinks $15-$20....I am looking forward to putting my tail between my legs and eating my crow dinner in front of you all!!!! realize I'm in a win win situation. If it sells for $6 I'm happy. If it sells for $20 I'm very happy and will be just fine eating crow for that amount of profit!!!!

[Heywood_Silvers]

NMPappy, I totally agree that no way this goes for $1 billion or less, not happening.  If Casino is a better project than Pensaquito (Dale thinks so, he is the expert, no?) then we know this is worth in excess of $1 billion in 2006 dollars.  What is that in today's value?  Over $2 billion. Oh by the way, did anyone notice that the base case NPV figures were concerning the first

[jclarke042]

Since yesterday, I've been wondering just what the point of this PEA was if nothing materially changed from 2013. Your point here brought me back to a question I asked the board (and got no response on) about Paul talking on Crux. He mentioned one of the ways WRN/RIO was discussing the plan was if RIO agreed to fund the project's "capital costs," they'd get the rest.