Value Microcaps Junior Miners

[steelpiston71]

NRDS, from another board

"Even though the stock has remained relatively stable what people fail to realize here is with the really low capex here the net returns will be very volatile. Roughly a 10 cent move in copper will effect the IRR of the project by 9%. This stock by no means realizes this volatility and I took advantage of the runup a month ago to face the facts and reluctantly dump my position.

All I can say given the known volatility in project economics I think it is getting very dicey here especially if you run the numbers in the FS with current copper prices. Plenty will depend upon what the revised cash costs of the operation when JC goes into operation. From the latest FS I extrapolated roughly a $1.70 cash cost for the operation that assumed a lower than current sulfuric acid price but higher diesel prices in the estimate however, both continue to trend down with copper prices. So that figure is an unknown now and hopefully for those who are long here it will go a bit lower.

27% of the production is hedged in 09 at $2.52/lb according to an SEC filing I viewed (a figure that has been misquoted by many because the figure uses a long ton assumption a 2200 not 2000 short ton divisor.) So that is roughly a guaranteed 5.5 mil in cash flow with close to nil on the rest if you assume the numbers in the old FS."