Liard shareholders are entitled to 30% of the Net proceeds.
Of that 30%, Copper Fox is entitled to (25% of 85.5%) + 1.55% (acquired outside the JV).
Assuming the following:
- Net proceeds = Revenues - C1 cost
That could mean Net proceeds = ($3.50US - $0.60 US) x 350Mlbs CuEq = $1015M US x 30% = $304.5M US
- 85.5% goes back to the SCJV = $260M US
- 75% of that goes to Teck = $195M US
- 25% of that goes to CF = $65M US
- an additional 1.55% goes to CF = $4.7M US
- the remaining $40M US goes to the other shareholders
Therefore, our Liard Shares could be worth $70M US per year with the above assumptions. Imagine with copper at $5.00 US? That would be over $100M US per year.
I believe the dividend might kick in once the capex is paid.
If assuming 5 years to build SC + 3 years for payback, that leaves 18 years of dividends.
- At NPV (8%) = $346M US
- At NPV (5%) = $548M US
- At NPV (3%) = $757M US
These numbers could easily be increased by 50% for the potential, as SC will be running for many many decades.
I'm sure many here agree that a dividend is way less risk than building a mine and the discount rate should be much lower. If there's a production decision make for SC, these shares will be worth a fortune.
Our Liard Shares could probably end-up being more valuation than the PEA post-tax NPV (8%) value. Don't be fooled by a small NPV (8%) number if all royalties are included in the PEA.
Don't hesitate to correct me if I'm wrong.
IMO.
MoneyK
