Hey there,I have been toiling away all day hoping for a boffin...

Hey there,

I have been toiling away all day hoping for a boffin to come out of the woodwork and actually put some financial analysis (not accounting analysis) around the numbers.

Alas, not one member of the NKWE congregation has shared their views.

However, not to be too discouraged with the lack of depth of the financial analysis, I have come up with some quick and dirty numbers -

n = 40
Capex = $0 (free carried)
Tonnes per month (average) - 320,000 (3.84m per annum)
Margin per oz = USD720
tax rate = 28%
Recovered g/t = 4.2 (28.35g per oz)
(NKP 50% Attributable oz = 284,444 pa)
Profit start at end of year 2 (start of year 3) (ie) zero profit in years 1 & 2)
CPI = 0% (netted off in the discount rate)

Disc Rate NPV ('000)

5% $2,256,029
7% $1,699,237
8% $1,495,403
10% $1,186,064
12% $966,386
15% $739,650
20% $511,498
25% $377,409

They are solid numbers considering the first 2 years have no earnings. (And I have ignored any corporate overheads which should be minimal (up to $10m per annum).

But where will the market perceive the discount rate is anyones guess.

A thread not so long ago I briefly mentioned this topic and there were vastly different views on it, but, once again, the thread decended into a squabble about an unrelated topic before anything meaningful was discussed, so I let it go.

I am personally at the higher end of the yield curve. But thats my guess.