Makamint, to be honest, i think that it would be premature to come up with estimations on future cashflow...the only math that can be tabulated is in relation to resource upgrades. This is only because all previous figures have been thrown out the window due to their decision to include the Darcy deposit into the Yukon Base Metal project.
The Darcy deposit [in my opinion] looks like a bigger mineralised system than the Andrew deposit...in addition, there is also a strong chance than the Andrew, Darcy and Darin [among others] are part of a huge system in the Yukon. Not surprised as the Yukon is known for is huge Sedex style mineralisations. Since OVR have locked in all of the relevant tenements around their discoveries, there is definitely an upside of continued expansion throughout their operation.
My numbers correlate to a 12.5MT resource [80% measured and indicated] when mine permitting is brought upon and a life of mine >10 years. I would be extremely happy with those numbers in 2011, and an NPV of circa 225++ million with an IRR of 15% or above...these numbers would get debt financing from the institutions quite easily. If OVR management [and the feasibility team] can structure a low cost [i.e. less than 100 million] CAPEX operation with a centralised processing facility in play, this Yukon project is going to be a great bonus for shareholders. I would assume commodity prices of 1.00/lb, 1.25/lb and 1.50/lb numbers are possible when this mine comes into operation.
However, i sincerely believe that by 2012, OVR will be bought over. This project was economically feasible since 2009, but with the discovery of the Darcy and Darin last year end, the numbers are now going to be much more stronger. Relocation of the Managing Director was the clear indicator to what we will be seeing in the coming months. These guys are starting to step it up in 2011. As shareholders, we would need nothing less....
- MC is only 22% of the current NPV 175 million [NPV numbers due to be higher with resource upgrades]
- DFS and Mine Permitting stage throughout 2011
- Drill ready Gold and Base Metal tenements are also in their stable
OVR Price at posting:
27.5¢ Sentiment: LT Buy Disclosure: Held
