Woulfe Mining Corp WFEMF

Valuation estimate

[fattail]

The way I see it is that the Glanville NPV calculation is still pretty appropriate and a good base to move off of ie. NPV = $575M after tax, discounted @8% using $375/MTU and a 1.2 million tonnes throughput. If you add 33% of their Moly NPV, it brings it to an even NPV of $600M.

We must now weigh the transfer pricing discount from the JV to IMC against some of the pickups from the Glanville calculation eg. $375/MTU vs. current $410/MTU, 2% royalty gone, 25% better quality & better Moly upside. This may be close to a wash but lets allow for another 10% discount - say NPV = $540M

Now if we base the spit in values between the JV and the mine on their perceived equities and therefore ROE we would have the JV @ $35M & the mine @ $140M (4 x $35M) or 20% / 80%

Value of WOF would then be:

45% of 20% of $540M =      ~$50M

75% of 80% of 540M =       ~$325M

Moguk estimate =               ~$  50M

Total                      =              ~$425M or $1.30 per share fully diluted

I think this is at least ballpark. Comments?

AB

[Majormac79]

sounds like a good estimate with out having earnings to drive it

[Majormac79]

woulfe has increased it's accountable resources by 2.5 times since that original NPV estimate of 575 million

[fattail]

I could be wrong here but I don't think that enters into it. Glanville when they did their calculation based the NPV on production of 1.2 million tonnes per year for 21 years which basically is what Brian was saying yesterday. Everyone seems to believe there is absolutely no problem with having the resources ultimately to cover that. A concern of mine, however, was the way Brian sort of

[Majormac79]

IMC gets a discount buying APT compared to its competitors, its a win, win situation This isnt Brian Wesson's first rodeo, he knows the in's and outs of running a business and wants his with high margins

[monti80]

As i understand the news its likely that woulfe is selling all the tungsten to IMC. Then woulfe and IMC are making APT out of it. To sell it again. And from that woulfe gets another 45 %. Do i understand that right. If that is the way it works, then it is a win win situation. Cheers Monti

[Majormac79]

yes it is how it works Raw tungsten sells for a 25% discount on average to the APT pricehttps://www.bloomberg.com/quote/MBWOEUFM:IND == SPOT PRICE = $437 times by 75% would be Raw tungsten price Raw = $327.75 per MTU is bought by to the APT plant IMC gets 25% of the profits woulfe 75% The APT plant processes the raw tungsten and then sells to IMC at the value added part of $437 which IMC gets 55

[fattail]

If you are intimating that there are disproportionately more profits in the APT processing than I gave in my valuation estimate then the estimate is too high as we only get 45% of the APT processing profits but 75% of the mining. If profits between are split evenly, then valuation goes down to $1.13 per share. There is a lot of dollars in the transfer pricing.    The Mine to JV 

[fattail]

As i understand the news its likely that woulfe is selling all the tungsten to IMC. Then woulfe and IMC are making APT out of it. To sell it again. And from that woulfe gets another 45 %. Do i understand that right. If that is the way it works, then it is a win win situation. Cheers Monti   Just to be clear here. We did not gain 45% of the APT processing profits. 100% were

[Majormac79]

The APT(ammonium paratungstate) PLANT is going to be considered a separate company owned 55% IMC 45% woulfe mining (joint venture)-For the purposes of the sales (Sandong's raw tungsten) owned 25% by IMC / 75% woulfe is sold to APT JV plant -raw tungsten trades at approx 25% discount to the total APT pricehttps://www.bloomberg.com/quote/MBWOEUFM:IND = spot price-Then the (APT Joint Venture

[Majormac79]

MY POINT BEING If you do the math most of the profit is in the raw tungsten sale where WOULFE owns 75%!

[fattail]

Yes! Exactly!

[swerv]

Based on your precentages and tungsten values i calculate profit as such: Assumming minig cost is at $220 Raw $327 and APT is 437 WOF Profit is $130 per and IMC is $87/per   Seem reasonable?

[Majormac79]

Brian had stated in the conference that the break even price for each MTU of APT was floating between 130-170 dollars   That must include the APT maintenance costs to

[fattail]

APT processing costs???

[Majormac79]

employees, fuel and chemicals

[junior_miner]

It doesn't appear you understood, so answer this question: Do you mean 25% discount on mt or mtu basis? What grades you imply for W concentrate and APT concentrate? Hint: https://www.metal-pages.com/metals/tungsten/metal-prices-news-information/ Consider this: LGO Northern Dancer APT plant operating costs are $1300 per tonne 50% concentrate. 65% concentrate sells for $21000 per tonne. ->

[junior_miner]

Actually I checked Malaga's last quarter and it seems they got 80% of the APT price for their concentrate. There are differences because of impurities etc, but it feels very high compared to plant opex. I don't think this is sustainable profit division.

[geezer321]

Using your figures, here is Woulfe's percentage of the APT output: Share of raw concentrate = 0.75 Mark up on concentrate to APT = 0.25 Concentrate marked up to APT =  0.75 x 0.25 =  0.9375  Woulfe's 75% of concentrate will capture 93.75% of the value of APT So Woulfe's 55% of APT output will capture 93.75% of the value of their share APT

[geezer321]

Using your figures, here is Woulfe's percentage of the APT value: Share of raw concentrate = 0.75 Mark up on concentrate to APT = 0.25 Concentrate marked up to APT =  0.75 x 0.25 =  0.9375  Woulfe's 75% of concentrate will capture 93.75% of the value of APT So Woulfe's 55% of APT output will capture 93.75% of the value of their share of  APT  

[Majormac79]

woulfe is 45% APT plant

[geezer321]

Thanks, 45%  of APt output will capture 93.75% of the value of their share of APT   Share of raw concentrate = 0.75 Mark up on concentrate to APT = 0.25 Concentrate marked up to APT =  0.75 x 0.25 =  0.9375  Woulfe's 75% of concentrate will capture 93.75% of the value of APT So Woulfe's 45% of APT output will capture 93.75% of the value of their share