silver play, page-4

Rockstar, as per Dec 18 accounts:

"Based on the discounted cash flow methodology, the fair value of Nueva Esperanza was assessed to beapproximately $30,000,000 including exploration upside of approximately $8,000,000 as at 31 December 2018which was below its carrying value of $61,851,000. This has resulted in an impairment of $31,851,000. The mainfactor contributing to the impairment charge was a lower silver price (US$17.43/ounce) used in this impairmentassessment compared to 30 June 2018 (US$18/ounce) and an increased discount rate to recognise the specificcircumstances of the sale process for this Project.As a comparison to the sale process information received to date, the carrying value after impairment based onthe discounted cash flow is consistent with the non-binding indicative offer so far received for the proposed saleof the Project and falls at the lower end of the range of the anticipated sale price as assessed by the Company’sfinancial advisers. The price expectation is a factor of weak equity/M&A markets in North America for resourcecompanies and a subdued silver price. "


When I first read this I thought they were in big trouble , the best offer they got was around $30million. They were saved by the settlement with Zurich

Every $1 increase in the silver price roughly equates to a $25million uplift in NPV from $19 silver and up

The CPM Group which publishes the Annual Silver year book and who I rely on for buy/sell decisions in silver, are projecting a rise in silver to over US$30 next 3 to 5 years, that is the average which means spikes to $40.

US$30 silver would value NE as is at more like $250million. If KCN kept the project and you waited a few years $1 is on the cards excluding the potential TAFTA payout

worth the wait!