Great in theory about getting over $42mil/pa from net silver...

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miningnut

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20/05/20

19:49

Post #: 44735506
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Originally posted by CtMonteCristo ↑

So ~58% in silver metal goes to the smelters. Not a very good deal. NCZ should renegotiate that ASAP.

So I estimate the total value of the silver from the tailings deposit to be around AUD$780 million (30 million ounces x AUD$26 ounce). We take away ~58% to the smelters = AUD$327.6 million

Smelter 80% payable on AUD$327.6 million = AUD$262.08 million

Take away $7.64 million (USD$5 million) primary debt facility for Varde = AUD$254.44 million

Say we make the assumption of even production for 6 years to simplify the exercise = AUD$42.41 million per year from silver production

Now we give the 10% for 4 years back to Varde for additional debt facility = (42.41 x 10%) x 4 years = AUD$16.96 million

So now we go back to the AUD$254.44 million and subtract the AUD$16.96 million = AUD$237.48 million

Silver payment worth ~AUD$237.48 million for the life of the tailings deposit after deducting the smelter and finance arrangements.

And NCZ still have another 20 million ounces of silver in the In-situ deposits that are indicated and inferred.

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Great in theory about getting over $42mil/pa from net silver receipts but I really can't get it over $17mil/pa based on about 2mil ozs/pa @ US$17.
I don't know if you've seen the following announcement dated 25Jun19 when they scaled back the tailings operation from 15kt throughput to 12kt. But you should read pg6 where they quote the silver recovered of 11,876k ozs over the six years.
https://www.asx.com.au/asxpdf/20190625/pdf/446345qmbjpqjg.pdf

Also attached is my cashflow schedule if interested.

NCZ Price at posting: 25.0¢ Sentiment: None Disclosure: Held
1 Upvote

0 Great analysis

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