The Mole,The discount rate used in calculating the NPV is 4%,...

First 99 Last

Share
Profile

Follow
shthcop

19 Posts.

19

17/03/19

14:47

Post #: 37789178
Share

Originally posted by shthcop: ↑

The Mole,

I just wonder the Karara magnetite deposit should be added to the claims. Karara has about 2,400 million tons of magnetite deposit and about 100 million tons deposit have been mined so far, leaving a balance of 2,300 millions tons to be mined and processed into about 900 millions tons of 65.5%fe magnetite concentrate.

GBG shareholders exclude Ansteel have 32.15% of this production or about 290 million tons of magnetite concentrate.

Since Karara is a producing mine and the management has stated in the NOTES 2. e) TO THE FINANCIAL STATEMENTS For the year ended 31 December 2017 that "KML's cash flow forecast as of the date of this report indicates that KML is projecting cash operating surpluses for 2018 and 2019", royalties could be a suitable method of valuing this 290 million tons of magnetite concentrate at 1-2% rate.

Currently the price of 65.5%fe magnetite concentrate is around A$140 per ton and at 2% rate, the royalties derive from the existing 8 mtpa plantwill be around A$8 millions for next 100 years (290 / 100 * 140 *2%) or A$16 millions for next 50 years if the plant is upgraded to 16 mtpa.

The NPV of A$8 millions royalties for next 100 years based on 8 mtpa would be A$196 millions or A$343 millions based on 16 mtpa, A$16 millions royalties for next 50 years.

This mining asset value could be viewed as credit offsetting the liabilities related to GBG's investment in KML.

Expand

The Mole,

The discount rate used in calculating the NPV is 4%, same as the KML borrowing rate in 2017, sorry for this omission.

GBG Price at posting: 2.7¢ Sentiment: Hold Disclosure: Held
Upvote

0 Great analysis

Reply

Top Stories

CMB

Asian Battery Metals uncover second massive sulphide discovery at Mongolia's Oval play

C1X

iTech inks deal with Chilean lithium giant to progress Reynolds Range

GRL

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

WC8

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

CAF

IP anomaly thrills Cannidah with project extension hopes in QLD

BTH

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

MIN

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

ASX Market Open: Aussie market to leap on best 'Trump trade' bump since election day | November 22, 2024

PCL

HotCopper users react as Pancontinental Energy's trading halt lift reveals little

ALY

Alcidion inks deal with Vic health provider Peninsula for use of Miya Precision tech

There are more pages in this discussion • 26 more messages in this thread...

First 99 Last

Add GBG (ASX) to my watchlist

The Mole,The discount rate used in calculating the NPV is 4%,...

Top Stories

Asian Battery Metals uncover second massive sulphide discovery at Mongolia's Oval play

iTech inks deal with Chilean lithium giant to progress Reynolds Range

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

IP anomaly thrills Cannidah with project extension hopes in QLD

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

ASX Market Open: Aussie market to leap on best 'Trump trade' bump since election day | November 22, 2024

HotCopper users react as Pancontinental Energy's trading halt lift reveals little

Alcidion inks deal with Vic health provider Peninsula for use of Miya Precision tech

Featured News