Niocorp Developments Ltd (NB)

[tedro84]

P/E is not relevant to a mine. A mine is a limited asset. Sure, there is the possibility of growth in the sector and further development, but ultimately the revenue producer of the mine is limited in supply. Hence the value is based on the NPV of the assets in the ground. For a company with a single mine, this means the share price is directly proportional to the remaining asset. Assuming the resource is fully understood, there is no room for growth, hence no reinvestment by the company, and all profits are paid in dividends. As the resource dwindles the duration of dividends shortens so share price goes down to zero when it has been fully mined.

http://ehrenworthsyme.com/casadeleon/docs/valuationofmining.pdf