RE: Berg Aukas Value11 Feb 2018 09:38
Patters, to answer your question, my specialism is accounting/finance and I did a very rough Net Present Value estimate for Berg Aukas. This is based on a 'conservative' 10% discount rate. I posted this last Monday and I have pasted my original post below.
My estimate is based on the Berg Aukas BFS sensitivity analysis on page 15 of the 'drop-box' link posted by TDT last Monday. The NPV estimate of $129m is after all taxes. This is equivalent to about 9 pence per share for WTI.
As the latest share price is only 2.1 p, I believe that this barely reflects the 'value' of Tschudi. Effectively, anyone buying at 2.1p is getting Berg Aukas + Kitumba + Central Ops for free.
The really HUGE potential upside for WTI is if copper heads higher in coming months/years. Every expert commentator quoted on this board is confident that copper is heading higher based on highly predictable supply and demand factors. When Kitumba + Central Ops are in production, WTI will be selling roughly 50,000 tons a year. Therefore for every $1,000 increase in copper, WTI will make an extra $50 million a year. This is for a company with a market cap of �22 million! I believe that there is no listed copper producer in the entire world which is more 'highly geared' to benefit from rising copper prices. A good way to look at WTI shares is that they are a cheap 'call option' on copper (and also zinc, lead and vanadium since WTI owns 90% of Berg Aukas). I hope this helps, F.
MY EARLIER POST:
Based on a very conservative 10% discount rate, project NPV = $29m after tax, based on Zinc being $2,000/ton.
Sensitivity analysis shows that NPV increases by about $20m (after tax) for every 15% rise in commodity prices.
Zinc is up 75%, therefore 5 X $20m = $100m.
$100m + original $29m = $129m.
This is worth about 9 PENCE PER SHARE to WTI, after all taxes and even though future cash flows (NPV) is heavily discounted at 10% interest rate.