npv, page-101

Sorry mate, I dont agree.

1.the discount rate is the host company cost of funding of debt & equity blended together.

2.NPV is the "best" outcome based on the assumptions used.

3. you then devalue the resultant NPV based on the hurldes still required to get the project to full production, to come up with the EV. This is why NKP is in the 40 cent bracket. RISK adjusted.

Working in corporate treasuries for a considerable period, the issue for X is not how to get funding, it is in the planning re funding - form offshore or onshore? and the manner in which funds can be extracted out of SA efficiently. These guys use CP market (or more recently capital markets) with little or no security other than their Bal Sheet rating. Which the last time I looked was still investment grade.

Banks tend to want too much security so to aviod this, they touch up investors who want a higher yield with less security.