"We've been using that nasty denominator all along in our valuations. There is no question that we need major grades, tonnage and daily processing to move our NPV/share significantly. However, there appears to be massive unveiled potential that has not yet been factored into anyone's valuations yet, imo."

The focus of this disussion keeps switching from valuation of the project/CUU to the potential in the hills beyond. Two very seperate items. It is hard enough to valuate the SC deposit with the hard numbers we've been given let alone what may or may not be in those unexplored hills.

There are plenty of unexplored hills on the market with lots of potential going for cheap. We just picked up two really good projects (in terms of known, accessible, high grade mineralization) for $2M. If someone gave us $100M for our unexplored lands, it would only amount to 25cents per FD share. I dont' think we'd ever see $100M for our unexplored lands.

"Chappy, based on what you have read was that half of an 8% or a 5% discounted NPV, and do you recall if weak insider ownership or weak financial position may have played a part?"

NPV calcs don't incorporate the notion of insider ownership. It does incorp, to some extent, financial considerations (i.e. financial risks). Discount rate is really about the time value of money (financing/oportunity costs and the unknown risks of time (mostly political risk)). A discount rate is chosen because it is deemed to represent the risk environment of the particular project and give the evaluator an idea of what different projects are worth relative to each other. 8% is a good rate for North American projects that don't get too fancy (tried and true mining methods in a politcally save environment). 10 to 15% is more applicable to projects with high political risks like in certain parts of Latin America. The discount rate is the equalizer in the NPV calculation that describes the relative difference in risk and equalizes it to a project value.

Using 8% discount rate for NA and 15% for Latin America, the NPV for two idential projects would be X$ in NA and 0.58%X in LA ($500m net revenue for 30 yrs each) respectively. The LA project's value has incorporated the risk. Remember, both projects would sell concentrate into the same world prices.

In other words, the 8% discount factors in the safety of our political jurisdiction. IMHO, 5% discount should not be used at all anywhere - beware of Feasibility Studies that anchor on that rate.

"I once tried searching for info on this very subject (% of NVP paid) but came up empty. Any search suggestions?"

Page 67, 4th bullet from the bottom: http://www.scribd.com/doc/16160045/Hard-Rock-Manual-Edition-3

I welcome anyone to find examples of projects sold for full NPV.

dyodd