If anyone sees any errors in my calculations please correct me:
Price per lb of ferrochrome: US103c/lb
Anticipated production from 2 (Not 3) prospects where KWG has 1% net smelter royalty: 400,000 to 800,000 tones of ferrochrome per year (based on the Cliff's own evaluation) ... lets use 600,000 tones
1 tone = 2,204.62 lb
600,000 tones = 1,322,773,000 lb * US$ 1.03 = US$ 1,362,456,190 ... (yes that's how much Cliff is going to get from their CAD 1.00/share take over of FWR.
KWG's share = 1% of US$ 1,362,456,190 = 13M/year of cash flow
Upside potential:
1. I used 600,000 not 800,000 tones per year & that evaluation includes 2 prospects only
2. Prices are expected to go up (read the article)
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References (I do feel like doing a school project in grade 10 now ... lol):
Quote from the article below: "... ferrochrome prices, now at US103c/lb, were expected to rise in 2010, with the Merafe marketing team in Asia at the time of going to press to negotiate second-quarter prices."
http://www.miningweekly.com/article/loss-making-merafe-bullish-on-ferrochromes-prospects-in-2010-2010-03-02
