RE: 12 month target...10 Dec 2020 22:24
Mines are not valued on what's underground. They're valued on what's underground, divided by number of years to extract it, minus costs. So a trillion dollars underground is not worth a trillion dollars. It's valued on how much can be made over, say, 20 years given reasonable extraction rates, likely sale prices and extraction costs. If the resource expires after 20 years, the buyer has to make their return during the 20 years, plus profits, as the resource will then be worthless. If it's as huge as Cinovec, the value will still be there after 20 years, assuming demand is maintained, so the investment is sound.... cash will be returned and profit also made in the interim. I have no doubt that Cinovec is worth a bomb on this basis. But I think EMH, as a small company, will be bought out, for a very good price, before production. Happily that buy out price will be far north of here, but I'm not sure how far north, hence the question.