Golfyeti: "Chappy, would you mind detailing your calculations or offering a link to your post that did so?"

It is funny how the 'low ball' estimates such as mine need to be quantified in detail, while the $6-$12 figures are simply applauded.

If anyone wants to challenge my figures AND quote $6 or higher, they had better show some detail calculations and use stated company numbers or reasonable assumptions.

$3

I have stated a $3 range a number of times. I have not posted my calculations per se, they take up two spreadsheets LOL! I am reluctant to post them for a number of reasons - the main one being that they are my numbers that give me a reference point that I understand. Explaining each cell for two spreadsheets is not what I am prepared to do.

My numbers crunch the 2011RE and the quoted recoveries, sales and mining costs etc with that estimate. I use a conservative 1.7gpt Ag with a 58% Ag recovery rate. I think Capex for a 120ktpd mine will be in the $3.7B ballpark (conservativley high). Scaling up for higher production rates I use 110% X $3.7B for 150 ktpd and 120% x $3.7B for 180ktpd.

Conservatively, I don't include exploration potential and I use fully diluted shares. I have not incorporated any forward thinking of the 2011 drilling and RE3 (more, higher grades, starter pit optimization, etc).

As I've said before, the problem is time. Discounting revenue at 8% per year for 26 years or more causes the final years to be of limited value today. Unfortunately, some of our best grades in Paramount won't be uncovered for one or two decades. It takes a while to make a 250-500m deep hole in solid rock in the side of a mountain.

A lot of folks have stopped looking for numbers when they see the in situ value. Take a look at the estimated metal recoveries (Cu 89%, Mo 64%, Au 73%, Ag 58%). Almost half of our in situe silver will never be liberated from the mined rock. Then look at the quoted (RE2011) metal sales costs (Cu $0.53/lb, Mo $2.74/lb, Au $6/oz, estimated Ag $6/oz). The in situ metal value is taking some big hits already and we still haven't mined it (2011RE "Total Ore Based Costs" $5.12/tonne).

Here is a low-ball sample calculation...

Here is what the SC 2011RE mine (bulk average, life of mine,without starter etc) looks like with the numbers above and these metal prices (also conservative): Cu $3.00/lb, Mo $15.00/lb, Au $1200/oz, Ag $20/oz)

120 ktpd for 360 days/yr: Net Revenue b4 taxes = $718,303,627.20 per year (LOM (23.41 yrs)

Yr Mine revenue b4 taxes

-4 -$370,000,000 (estimated Capex spending b4 production)

-3 -$740,000,000 (estimated Capex spending b4 production)

-2 -$1,110,000,000 (estimated Capex spending b4 production)

-1 -$1,480,000,000 (estimated Capex spending b4 production)

1 $665,095,951 (first year of production)

2 $615,829,584

3 $570,212,578

4 $527,974,609

5 $488,865,379

6 $452,653,129

7 $419,123,267 [mine payback year]

8 $388,077,099

9 $359,330,648

10 $332,713,563

11 $308,068,114

12 $285,248,253

13 $264,118,753

14 $244,554,401

15 $226,439,260

16 $209,665,982

17 $194,135,168

18 $179,754,785

19 $166,439,616

20 $154,110,756

21 $142,695,144

22 $132,125,133

25 $104,885,191 (Last FULL year of production)

24 $46,443,162 (Last & PARTIAL year of production)

NPV $3,778,559,526 [ CUU portion: 25% CUU after 75% Tck earn-in = $944,639,881.44]

IRR@ 8.00%= 8.68%

Divide the CUU portion by fully diluted shares = $2.46 per share

jmho, dyodd