NPV estimate...13 Dec 2018 20:43
I don’t tend to post here (tbh, the occasional childish behaviour has put me off), but the lack of scoping study data has frustrated me, so here goes...
I’ve tried to follow Oiltap’s NPV calculation advice - here’s an outline of what I’ve put into my model:
- 500k tonnes mined per year with 10 year mine life (source: Miles Campion proactive investor video)
- 6% Zinc, 4% Lead (assumed from Miles Campion’s comment on mining the high grade core outwards)
- 20% reduction during processing (assumed from looking at some typical mining recovery rates)
- $ rates for zinc and lead per the (infamous!) scoping study
- 15% zinc smelter fee; 5 % lead smelter fee (from various mining company accounts including CAML)
- 1.5% smelter royalties to Lundin AB (per scoping study)
- Spanish Corporation Tax at 25%
- Opex costs of $1000 per tonne (rough average I’ve seen from other company accounts)
I’ve modelled a few different scenarios at different discount, recovery grades and lower Zinc and Lead rates, and I get an NPV of between $180M-$230M. $200M was quoted on the Vox podcast today so I reckon I’m on the right track. How does this line up with your calcs Oiltap (or anyone else)?