via Calculator Soup - Net Present Value Calculator

My thesis is that the company has raised the necessary capital for expansion through escrowing of production, and that all production noted comes out of the escrow account. Dore is escrowed, rather than sent to a refiner.

Only the bars necessary to run the mill, the extensive unannounced drill programmes, continuous mine development, and refurbishments are all paid for using the escrow account, it is part of the financial structure of the company. None of the bars poured at the mill count as production.

But the bars used to pay costs are expected cash flow, or costs. In the Net Present Value calculator that would count as interest. The only way these numbers work to meet with outstanding agreements is if you use 25% interest.

Instead of piling a bunch of quarters on the table and trying to guess at production escrowed or what was claimed to be poured at the mill, you average the total production declared over four years. Each percent of interest represents a 1000 oz. dore bar. So 25% interest means 25k oz. production used to pay costs. This also covers any changes in grade.

In the first three months of production the company produced 45koz. This was the prepaid cost for the first year of production, thus you can assume 135koz. per year in the full year. Once commercial production was declared, this 45koz. was used as the production number, but had already been poured at the mill. The rest of production was escrowed, which was all of the production for the year. (You have to remember that the company raised capital prior to any production sufficient to refurbish the mill and develop the Roy Lloyd mine, draw broken ores from Komis and Star Lake, and open pit the Alimak Zone.)

Interest rate 25%

Compounding: 1

Cash flows at period: Beginning(In Advance)

Number of lines: 4 (as in four years)

All Periods Are: 1

Line 0 is -45,000

All Cash Flows Are: 135,000

Each dollar amount actually represents one ounce of production.

You should get 353,520 as the result. This meets with and fulfills the various agreements, such as the Waterton, Level 1 and Level 2 Marketable Securities after costs.

Averaging 353,520 over four years will give you production numbers in line with what we are seeing in quarterly reports. If you add back the cost, 25% by mulitplying 1.25X, then you have an idea of the production level.

There would be a surplus of bars held in escrow, and stockpiles could run the project for a year at virtually zero cost once the first phase of production was completed, which is why the company claims to have ceased operations. Everything is going into escrow.

http://www.calculatorsoup.com/calculators/financial/net-present-value-calculator.php

via Houston Chronicle - Accumulated Deficit On The Balance Sheet

"Considerations

An accumulated deficit does not necessarily mean a company is in financial trouble. There are some cases in which a business might have an accumulated deficit and still have a strong financial future. For example, a young, small business that has yet to generate a profit could show an accumulated deficit on its balance sheet because of start-up costs but might be rapidly acquiring new customers and increasing its revenue. One period of profit could turn its accumulated deficit into positive retained earnings."

http://smallbusiness.chron.com/accumulated-deficit-balance-sheet-43886.html

via Investopedia.org - Retained Earnings

An asset-liability mismatch would occur if you held all of your production in escrow, but these are undeclared assets or retained earnings.

I assume that the accumulated deficit would be matched against any capital raised by selling bars held in escrow, since you can avoid paying taxes on that amount.

The company has no debt and prepays all expenses.

http://www.investopedia.com/video/play/retained-earnings/

-F6