nkp summary, page-4

I have to say that based on NKP getting free carry 40% of the total PV (i.e. NPV plus upfront capex which would be paid for by a JV partner) implies a market cap of $589m for NKP (ignoring other projects)

Once a JV is announced I would expect NKP to rally to HALF of the above value. This is my experience with African projects.

So my market cap target is $294m. This implies a value per share of just under 50 cents. I think a lot of people have being using blue sky numbers and were looking at $1+. I personally was previously looking at 50-70cents (after heavy discounting) and can arrive at 50 cents comfortably with moderate discounting. However this is a far more certain 50 cents because the numbers are real and NKP have met their first real deadline and are now substantially derisked in my view.

There is additional value in the other tenements, but I think its safe to assume that the market will only value these once the runs are on the board.

Further I note that the BFS numbers released are conservative and are most likely the result of negotiation between DRA and the technical team representing the JV partner. These are NOT blue sky assumptions (which must be heavily discounted). These assumptions are very conservative if you look at comparable companies.

From a JV partner perspective they are getting say $884m (60% * ($832m + $641m) of raw PV for a price of $641m, plus access to all the other tenements and future opportunities that NKP can bring. I see the rumoured Chinese as being most interested in what NKP has to offer because they will place a high value the long term opportunities which others won't value. The project would be marginal for others, but with Chinas 22% growth rate in motor vehicle purchases they need access to platinum so I can see them doing a marginal project (from their perspective) for strategic reasons.

I stress that from NKP's perspective the project is not marginal if they don't have to put up any capex because they get the 40% of the PV value for free and the share price should start trading 30-50 cents after a signed / sealed JV deal.

Also DRA obviously see 30 cents as a good deal for NKP shares. Based on that i think 30 to 50 cents is a realistic picture of where NKP will go now we have some FIRM numbers on the table.