I think you guys are all way underestimating the impact on NPV of all the recent economic improvements that they announced.
The low numbers being thrown around lately resemble numbers that were thrown around even before we were shocked with the bewildering improvements, great improvements. Maybe you guys must still be shell-shocked and haven't gotten around to pricing these in yet, lol.
An NPV result doesn't care if it shocks people. It is supposed to be a result that is as unbiased as can be achieved with current knowledge and reasonable assumptions. It's the best possible estimation of today's discounted value of a string of the future expenses and incomes. Massive improvements have been made to the most influential components, those that are largest in value in the equation (size, timing and duration of initial capex) and the proximity of expenses and incomes based on speed of build and advancing of income streams (less discounted and more certain).
An NPV result in mining is derived from a mathematical equation of appoximately 14 to 15 major components that you can lay out in a long string of mostly simple multiplication exercises, i.e. tonnage X strip ratio X recovery rates X .... etc etc.
Improving any one of those 15 components by say 10% improves your NPV result by 10%. Improve one component by 100% (like they did with strip ratio) and the NPV result jumps by 100%.
When you have such a long string of multipliers, each of which subject to improvement, you get a potential compounding effect that can become quite amazing. If you on average improve each component by 10% in a 15-component mutiplication the NPV jumps by 418%. Yes, four times the NPV just for improving each component by 10%. And we have some components so-far-announced that have jumped by 100% already.
There is a massive chasm between spot metal prices and the antiquated LT concensus pricing. Like a 25 - 40% chasm in prices used in current NPV calcs. I'd like to tell Don to put that component too in his NPV pipe and smoke it.
Oh and let's see what the NPV is then using a reasonable 5% discount rate.
