spot valuation for cloncurry , page-8

Good to hear from you noellyn,

I'm just sitting home bored & it's too hot outside to do anything, so I'll play the valuation game.

I've always been reluctant to post a valuation of a company on HC, I have seen other posters do it on other threads and cop heavy flak from posters who dont agree with the way it has been calculated or the prices used or just about anything else that could be argued about.

But anyway here goes, for what it's worth.............

I always have a rough valuation on hand of any investment I hold, so if the shareprice spikes, I have some idea when the company is moving into overvalued territory, then I can sell some (or all) with the view to take a nice profit, or buy back at a lower price, or buy more back for the same cost, depending on what I think of the company at the time.

I will do a rough valuation for an offtake deal with Xstrata for the whole CCP.( all care & no responsibility taken) DYOR.

Exco currently have 55.7 m/t of ore in the CCP, containing 470,000 t/Cu @ .85%, & 394,000 oz Au @ .22%, they also are expecting to recieve credits for Cobalt & Magnetite.

For a ballpark valuation I will use a CuEq calculation as this puts all the numbers into one figure, and is therefore easier to use.
The problem with using a CuEq figure is that it is very subjective, the calculation uses individual prices for each mineral, and these prices change every day, I think this is why MA does not announce Exco's results in this way, so bear with me.

I have used an Excel spreadsheet to make a calculator that converts all the announced grades of Copper & Gold, into a CuEq figure.
However Exco has not published it's Cobalt & Magetite grades for E1 ( they have announced some Cobalt grades for Salebury, but not for E1 that I can find.)
The Salebury Cobalt grade was 619ppm & 734ppm ( in two holes), I guess that they were so good that they were worth announcing.
So I will take it that the Cobalt is fairly low at E1 and we will take the credits, but are not worth including in any announcements.
So for the sake of a calculation, I used 200ppm for Cobalt and did not include any Magnetite figure at all.( I guessed that both Cobalt & Magnetite together would be worth what 200ppm of Cobalt is worth).

Using round figures of $4.00lb for Copper, $1400oz for Gold & $40lb for cobalt & a cut off of 0.5%, I get a figure of 1.17% CuEq for the CCP( you will just have to go with me on this, take it or leave it).

To show how much variation there is using CuEq & why it is not the best for company announcements, during December I have had variations from 1.12% to 1.23%, with the changes in the Copper, Gold & Cobalt prices, so it's a ballpark figure at best.

So with 55.7 m/t of ore at 1.17% CuEq, that is 651,690 t of CuEq metal in total.

I will use a round figure of $9000 t for Copper.

Now for another assumption, I need to guess how much Xstrata might pay for the ore from Exco.
After checking around on google etc., an acceptable figure is 65% of the Spot price, this allows Xstrata to process the ore and make a profit on the concentrate ( once again, you will have to take this number or leave it)

So 65% of $9000 is $5850 per tonne.

Exco have 651,690 t of CuEq @ $5850 t = $3,812,386,500 total value of the CCP.

Exco have said it will cost around $50mil to get the mines up and running, so take that off and get $3,762,386,500.

Divide this over a 10 year mine life this would be $376,238,650 per year.

Divide this into 347mil shares on issue and you get $1.08ps, for a take off ore supply to Xstrata.

Add in White Dam at around 12cps ( calculated in the same fashion, so if you dont like the CCP calculation, you wont like the WD one either) = $1.20ps.

This takes no cosideration of other tennements or corporate costs to run the company.( At a guess they would almost balance out at the minute, say 5cps for other tennements right now, & 5cps to run the company ( Ballpark again). As Exco proves up Salebury & Hazel Creek in particular, I expect them to more than take the place of White Dam when it's at the end of it's mine life)



When I do these valuations I know they are only ballpark numbers & my aim is to be " nearly right, and not completely wrong"

So I get $1.20ps with a take off ore deal with Xstrata & including White Dam.


Remember I have NO QUALIFICATIONS whatsoever !!!!
DYOR DYOR DYOR DYOR DYOR DYOR DYOR DYOR DYOR DYOR

cheers