WHERE DO YOU SEE THIS GOING?, page-10

I've been tidying up my spread sheets to try and give two of my grand sons who are at uni and interested in investing their part time earnings into the market the heads up on what I'm investing in. I'm trying to turn them away from even talking about APT and Bitcoin.

They don't seem to understand that there are no central banks behind Bitcoin and that APT is a high risk lender that doesn't charge enough to ever make a profit and is being rewarded for building its loan book at a great rate by effectively giving money away.

Before getting into the spread sheets, on the subject of pallets of wine, a mate of mine and I wanted to borrow some money to buy a development site in the early 90s. The state manager of our bank told us that we were living in an age when the big four banks could go broke and there was no way they could lend us any money but to soften the blow he said he could sell us a pallet of wine. It was the Leeuwin Estate Cabinet Sauvignon that had won an international gold medal. The reason he was selling it was because Leeuwin Estates was having trouble servicing its loans and the bank had control of their inventory. The deal he was offering was too good to be true so we said OK provided he lent us the money which he did. Better to blister us to get rid of his problem with them I guess. I was amazed how quickly we got through it.

But enough of that, as you like numbers, you might be interested in giving me another opinion check before I pass these spread sheets on to the kids.

The following spread sheets assume that the mining cost for high grade ore will be $75/tonne and for bulk mining 1% grade the mining cost will drop to $30 Those figures are nothing more than an educated guess and simply serve to draw attention to what might possibly happen if we lower the cut off grade dramatically and can achieve closer to open cut mining costs using a bulk mining method.

I've assumed a cu price of $US 5.

I have also assumed that the capital cost for high grade will be $20m and for a bulk mining operation to extract large quantities of low grade will be $100m and that either way it will be possible to fund that expenditure with forward sales or other forms of debt at a cost of 6%pa













I can see one error in the calculations and I'm sure there are some clangers in the logic.