Over the last two months, we’ve been hurt by lower metal prices combined with a higher share count. It’s cost us $9.57 per share in lost Magpie value (from $112.56 to $102.99 at 2% of Market).

On 5 July 2012, I posted Magpie values both in terms of individual metal oxides as well as in terms of those oxides being somewhat less refined (that is containing 75% of the non-ferrous oxide combined with 15% iron and 10% impurities and smaller metal components). Breaking the metal down into its pure oxide form gets more than an approximate 39% higher market price than breaking it down less and leaving in 15% iron. I explained this in greater detail in my 5 July 2012 posting (as follows).

http://agoracom.com/ir/Fancamp/forums/discussion/topics/537431-magpie-ferro-titanium-ore-112-56-share-at-2-of-market/?message_id=1697016#message_1697016

Regardless, of course, more refined ore prices and less refined ore prices will move up and down, in tandem, according to how the market values the underlying metal. So, in the following update, I am simplifying matters by restricting myself to the less refined scenario, which will get us the 39% lower valuation. I am not so much doing that to be conservative, as I’m doing it because, on the spot market, non-ferrous metal ores are generally sold in the less refined form (which leaves in an acceptable range of percentages, the midpoint containing approximately 15% iron and 10% impurities and other metals).

I’ve taken the ore tonnages from our 1 June 2012 NI 43-101 Magpie Press Release. I’ve used the Spot Metal Prices, predominately from the 4 September 2014 markets’ closing. I have no chemical or metallurgical or geological expertise. This is purely an exercise in mathematics.

Magpie #2 Deposit In Pit Resource at 15% FeT (Total Iron) Cut-Off (in metric tonnes)
635.2 million tonnes Indicated – Fe2O3 60.78% – TiO2 11.20% – Cr2O3 2.61% – V2O5 0.30%
293.2 million tonnes Inferred – Fe2O3 60.49% – TiO2 11.21% – Cr2O3 2.54% – V2O5 0.32%

433.75 million tonnes = Our share from our 46.72% ownership of Combined Indicated and Inferred
Fe2O3 60.69% – TiO2 11.20% – Cr2O3 2.59% – V2O5 0.31%

Million metric tonnes = 263.24 = Fe2O3 ($122.48 CAD metric tonne 28 August 2012)
Million metric tonnes = 251.01 = Fe2O3 deducting Ferro Titanium, Ferro Chrome, Ferro Vanadium

Million metric tonnes = 64.77 = Ferro Titanium (6,935.77 CAD metric tonne 4 September 2012)
Million metric tonnes = 14.97 = Ferro Chrome ($2,724.98 CAD metric tonne 4 September 2012)
Million metric tonnes = 1.79 = Ferro Vanadium ($24,520.00 CAD metric tonne 4 September 2012)

$30,743,704,800 (251.01 million metric tonnes x $122.48 market price) = Fe2O3
$449,229,822,900 (64.77 million metric tonnes x $6,935.77 market price) = Ferro Titanium
$40,792,950,600 (14.97 million metric tonnes x $2,724.98 market price) = Ferro Chrome
$43,890,800,000 (1.79 million metric tonnes x $24,520.00 market price) = Ferro Vanadium

Total = $564,657,278,300 Market Price

1% of Market Price = $51.49 per share ($5,646,572,783 / 109,655,620 shares outstanding)
1.5% of Market Price = $77.24 per share ($8,469,859,175 / 109,655,620 shares outstanding)
2% of Market Price = $102.99 per share ($11,293,145,566 / 109,655,620 shares outstanding)
2.5% of Market Price = $128.73 per share ($14,116,431,958 / 109,655,620 shares outstanding)
3% of Market Price = $154.48 per share ($16,939,718,349 / 109,655,620 shares outstanding)