Pre-production mining companies use both spot and rolling average price of IO when calculating project NPV, directly correlating to the profitability and value of the project. HIO is in this realm.
The higher the spot price at BFS, the higher the NPV, therefore the juicier the investment looks to investors or strategic partners.
The higher the spot price, the higher the rolling average will become over the period in which it is being used.
Overall, the spot price leads to a higher NPV at BFS, as well as dragging the rolling average up, whether 2, 5 or 10 year etc. meaning the spot price well and truly matters, even with a pre-production miner.
HIO Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
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