NPV is the present value of all future estimated income, after taking into account all future estimated expenditure (including capital expenditure). In other words, what you would notionally pay now, to acquire the future net income the project would generate. The present value of estimated future income is discounted very heavily to take into account the risk that the investment goes pear shaped and all the variables and unknowns inherent in the project.
The difference between NPV and the market cap of the company represents a discount for risk that the company will not be able to fund the project, bring it to production and sell the product at the expected sale price. Here - it is a very deep discount. Most posters here think the market over-estimates that risk. It is the de-risking process that creates the multi-bag returns we chase. Or it goes pear shaped and we do our doe.
BAR Price at posting:
5.0¢ Sentiment: Buy Disclosure: Held
