Thursday, January 28, 2010 9:59:02 PM
Nice job rich!
Now, we still have challenges to get through, but if you want to start to look at the potential of this operation, read on:
FYI, 3700-4800 tons from Rich would be the amount of ore run through the mill on a daily basis. I believe that those numbers will be met down the road, and that they may even get to the stated mill capacity of 5200 tons way down the road. For the near term, I would probably go more with 3000-3500 tons per day as a good running rate to achieve over the next few months. For the sake of a conservative discussion, let's use 3000 tons of ore per day. IF we run 3000 tons of ore per day, and IF we have 1.7% copper in the ore, and IF the new cells achieve the goal of a 65% extraction rate, and IF we end up with CuCon of 33% copper, then:
3000 tons x 2000 lbs/ton x .017 copper content = 102,000 #'s of Cu. in the ore per day.
102,000 x .65 extraction rate = 66,300 #'s Cu extracted per day.
66,300 / .33 copper in CuCon / 2000#/ton = 100 tons CuCon per day
Daily production revenues (keep in mind these prices are down right now):
66,300 #'s Cu x $3.15/# x .9 after fees = $188,000/day Cu
100 tons x 18 oz Ag x $16.50/oz x .9 after fees = $26,000/day Ag
100 tons x .25oz Au x $1100/oz x .9 after fees = $25,000/day Au
For a daily revenue of $239,000
Annual revenue x 340 days = $81M per year in conservative revenues.
Assuming operational expenses are around $1M per month, and admin and office adds 20% to that, then you end up with around $15M in annual expenses. Take that from revenue and you end up with around $66M/year.
Assuming we get LTF of $120M, for 20 years, at 8% interest (this is a total guess on my part), then the annual cost to pay down the LTF would be $6M. We should have enough carry over losses to avoid paying taxes for a couple years, so we end up with a net annual profit before depreciation of $60M. And this doesn't take into account the cementation process or the magnetite sales.
Again, lets go with worst case and use $60M as our total net profit and 5B as the O/S. That comes to $.012/share profit. If you use a conservative P/E multiplier of 10, then you should see a share price of $.12, and with that kind of profits, maybe even see $.005 per share dividend (I can dream
.
If you assume that we will retire and buy back shares to get the O/S to $3.5B, and you add in $20M for cementation and mag sales, then you have an annual profit of $.023 per share. Times P/E of 10 gets you a share price of $.23, and maybe $.01+ in dividends.
And while we still have a long way to go, that could be a starting point for where this could go in the future.
All IMO.
FFF
Now, we still have challenges to get through, but if you want to start to look at the potential of this operation, read on:
FYI, 3700-4800 tons from Rich would be the amount of ore run through the mill on a daily basis. I believe that those numbers will be met down the road, and that they may even get to the stated mill capacity of 5200 tons way down the road. For the near term, I would probably go more with 3000-3500 tons per day as a good running rate to achieve over the next few months. For the sake of a conservative discussion, let's use 3000 tons of ore per day. IF we run 3000 tons of ore per day, and IF we have 1.7% copper in the ore, and IF the new cells achieve the goal of a 65% extraction rate, and IF we end up with CuCon of 33% copper, then:
3000 tons x 2000 lbs/ton x .017 copper content = 102,000 #'s of Cu. in the ore per day.
102,000 x .65 extraction rate = 66,300 #'s Cu extracted per day.
66,300 / .33 copper in CuCon / 2000#/ton = 100 tons CuCon per day
Daily production revenues (keep in mind these prices are down right now):
66,300 #'s Cu x $3.15/# x .9 after fees = $188,000/day Cu
100 tons x 18 oz Ag x $16.50/oz x .9 after fees = $26,000/day Ag
100 tons x .25oz Au x $1100/oz x .9 after fees = $25,000/day Au
For a daily revenue of $239,000
Annual revenue x 340 days = $81M per year in conservative revenues.
Assuming operational expenses are around $1M per month, and admin and office adds 20% to that, then you end up with around $15M in annual expenses. Take that from revenue and you end up with around $66M/year.
Assuming we get LTF of $120M, for 20 years, at 8% interest (this is a total guess on my part), then the annual cost to pay down the LTF would be $6M. We should have enough carry over losses to avoid paying taxes for a couple years, so we end up with a net annual profit before depreciation of $60M. And this doesn't take into account the cementation process or the magnetite sales.
Again, lets go with worst case and use $60M as our total net profit and 5B as the O/S. That comes to $.012/share profit. If you use a conservative P/E multiplier of 10, then you should see a share price of $.12, and with that kind of profits, maybe even see $.005 per share dividend (I can dream
. If you assume that we will retire and buy back shares to get the O/S to $3.5B, and you add in $20M for cementation and mag sales, then you have an annual profit of $.023 per share. Times P/E of 10 gets you a share price of $.23, and maybe $.01+ in dividends.
And while we still have a long way to go, that could be a starting point for where this could go in the future.
All IMO.
FFF
Join the InvestorsHub Community
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
