yes hector, that is quite correct, you have to balance the DCF against the probability of 1) the assumptions used underlying your calculation come true and 2) the likelyhood of a mining operation happening? ofcourse if the calculations lead to massive share price calculations but it was unlikely a mine would ever be set up then the calculation becomes useless. for MAK it was quite obvious though, no sovereign risk, infrastructure with rail leading to port in place, logistics are simple trucking to tennant creek, low levels of overburden so open cut is very possible, not in flash flood territory so another risk gone, N.T department for mines and fishery bending over backwards to help develop it, no native title issues, access to power, fly in work force possibilities, bore holes for water... against that backdrop the DCF looks very likely to be achieved on a mine possibility basis. on assumption basis we will know when we get there i suppose... but the underlying structural shifts in ag are definetly supporting more bullish than average fundamentals for rock phosphate, so its reasonable to assume price above $100/t when doing calcs... all imo
AEV Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
