Just a warning for those attempting to try to recalculate an NPV valuation for discount rate 8%.
Note that on the 'sensitivity analysis' included on page 37 of the ASX release, the increase/decrease amount ($33M/($22M) for a "1% change in discount rate" should not be interpreted as though it can be applied to factor the NPV to a 8% discount rate. It ONLY applies to 13.6 +/- 1%. i.e. at discount rate 12.6% the NPV is +$33M bigger. It does NOT mean at 11.6% (for example) it is 2 x 33 = $66M bigger. An NPV chart is NOT linear.
The upshot of this is the NPV at, say, 8% is going to be MUCH larger than simply adding (13.6 - 8) x $33M to the NPV.
The fact they even include change in discount rate in a sensitivity analysis is a bit dubious anyway for my mind. Sensitivity analysis should be on unknowns or estimates subject to error, like commodity prices, FX rates, capital and operating estimates, etc. The discount rate should be a known standard corporate assumption - which it probably is, and it is likely 8% which is why it is not presented as such.
NKP Price at posting:
5.1¢ Sentiment: Hold Disclosure: Held
