Ok, now that the NPV concept is well understood, let’s calculate the NPV (8%) with the below assumptions.

-      Capex at 2.7B and 4 year construction with below cash out.

o    Y1: -400M

o    Y2-3: -800M

o    Y4: -700M

Net cash flows:

o    Y1-7: 900M

o    Y8-21: 600M

Entering all these values in the calculator should give you a positive NPV (8%) around 3.2B for 100% of the project.

The interesting portion is to look at the change for each company.  Let’s remember that the NPV (8%) values were 151M for Teck and 369M for Copper Fox.

For Teck (75%), see below the approximate new stream of net cash flows (in millions) based on the above assumptions.

Entering all these values in the calculator should give you a positive NPV (8%) around 2.3B

For Schaft Creek (25%), see below the approximate stream of net cash flows (in millions) based on the above assumptions.

Entering all these values in the calculator should give you a positive NPV (8%) around 900M

Conclusion:  Teck would move from 151M to 2.3B (15x the initial value) and Copper Fox would move from 369M to 900M (2.5x the initial value).

IMO.

MoneyK