Good luck Tendies4me,I'm not sure how you calculate how they are...

Good luck Tendies4me,

I'm not sure how you calculate how they are not profitable. Using the info you mentioned in your earlier thread form the PFS, being a drop of -/+10% equates to a decrease/increase of $35 million to pre-tax NPV. The Company used a nickel price of A$35,294/t and had a pre-tax NPV (8%) of $164 million in the Baker PFS.

Nickel is today roughly A$24,000/t. That is a drop of 32% in the nickel price. That equates to a drop of $112M pre-tax NPV (3.2 x $35 million), meaning pre-tax NPV is $52 million today.

Still profitable but nowhere near as good as it was. However, market capitalisaiton is now $85 million at $0.39c. Enterprise value (assuming ~$30M cash) is $55 million. So pretty much, all your paying for is Baker Ore Reserve if you buy today. Free option on others (in particular Foster which has 39kt in indicated @ 3.2% Ni, some of that will convert to Ore Reserve). Not to mention upside below Baker.

As others get fearful with negative nickel sentiment, I get greedy.

P.S.

Another way to calculate value of Baker is as follows:

A$ Nickel Price per tonne x Grade x Recovery x Payability less AISC per tonne less Pre-production per tonne is the margin per ore tonne, multiplied by number of Ore tonnes.

Using numbers from PFS, except Nickel Price (A$24,000/t) and Payability of 72.5% (payability not quoted but I've tried to back calculate)

A$24,000/t x 2.86% x 91.2% x 72.5% less A$340/t less A$30/t = A$83.80/t margin per ore tonne.

612,000 tonnes of ore in Ore Reserve = $51.2M.