Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
Countthechickens. This is the bit that kick starts it, they can if they have spent no less than US $20m by way of expenditure towards completion of the FS … it should never have been included. It should have been on completion and publication of the FS … bad deal at the time !
Stage 4 “. . . . . completes and delivers, or incurs no less than US$20 million by way of Expenditure toward the carrying out of, a FEASABILITY STUDY . . . . (Stage 4 Commitment)”
If they all estimate ( brokers ) 12moz @ $1800/oz and an AISC of $700 that’s $1100 x 12m = $13.2bn .. divide by 20 = $660m for 5% .. but we all know and they do too that there is more than 12moz there .. so the 5% payment will be interesting !
There is no way on earth that 5% will be anything less than what the loan is, and probably multiples of that, if and it’s a big IF … NCM and GGP know this is a 20moz mine then 5% is worth 1moz x current gold price minus AISC which could be in the region of $1bn, but I don’t think they will pay that. Anything between $300-500m I think may be acceptable to both parties !
Correct ! So why say how you think the independent assessor will come up with their own value, then take the one nearest to that, both GGP and NCM valuations will be assessed and one will be judged to be fair market value, nothing else ! That is if they are outside 10% which I don’t think they will be, as I think both will come to an acceptable agreement !
What don’t you understand ?
Under the joint venture agreement, if the option exercise price cannot be agreed by this date, each party is thereafter required to notify the other of its assessment of fair market value. If both parties' assessments are within 10% of each other, the option exercise price will be the average of those assessments. If both parties' assessments are not within 10% of each other, the parties will proceed to independent expert determination, with the expert being required to determine which of the values nominated by the parties is to be the fair market value.
Read this gives an idea how it is worked out .. future revenue is included ;-)
Classification of Valuation Models according to type of Mineral Assets
There are three different approaches to valuation,
Income / Cash Flow Approach: it relies on the “value-in use” principle and requires determination of the present value of future cash flows over the useful life of the mineral asset. Valuation methods for this approach include: Discounted Cash Flow, Real Options, Monte Carlo Analysis and Probabilistic Methods
Market Approach: it relies on the principle of substitution. The mineral asset is compared with the transaction value of similar mineral project transacted on an open market. Valuation methods for this approach include Comparable Transactions, Option Agreement Terms, Gross “in Situ” Metal Value, Net Present Value per unit of metal.
Cost Approach: it relies on historical and/or future amounts spent on the mineral asset. Valuation methods for this approach include Value per Unit Area, Market capitalization, Appraised Value, Multiples, Geoscience Factor.