NPV vs Increasing Market Cap, page-9

Quicksilvasurfer,

An expansive post for someone who doesn't hold and thanks the company is way overvalued.

The reason for continuing to expand the resource and the Ore Reseve should be obvious - most importantly it is to allow expansion of the production rate to 3 MTPA or more. This is completely obvious and an absolute certainty in my view.

As for your remarks regarding valuations, in simple terms:

- Define what is in the ground in terms of tonnes and grade (Resource Drilling)
- Determine that marketable products can be produced (Met studies)
- Determine that you have customers for those products (MOUs, leading to binding off takes)
- Determine the current and forward estimates for the prices those products can/will achieve
- Determine the capital and operating costs of producing the said products
- apply a discount rate (which progressively gets smaller) to account for risks like permitting, logistical considerations, market changes, etc
- Apply a premium for the strategic nature of a world leading resource of this type.
- There's the basis of your valuation

How else would you value a pre-production project?