MikeMennell quote – “ To get some perspective, the big Potash...

MikeMennell quote – “ To get some perspective, the big Potash players in Canada have mkt-caps of 17-35 BILLION!!”

Has there been any NPV estimations done on Kola? Its probably too difficult at this stage prior to a scoping study. If anyone has crunched any numbers then I’d be interested to hear.

Now this is going to sound very simplistic and feel free to shoot me down and share your personal views.

In the days of my junior iron ore exploration company investing we used to quote rough rule of thumb numbers of what companies were being taken over for. It was expressed as an IGV or in ground value of the ore. Some explorers were being taken over for a price of say 2 or 5 dollars per ton depending on the fundamentals and circumstances surrounding the particular company. That was in the days of around $200+ per tonne for hematite.

Now potash is around $460 per tonne but carnallitite and sylvinite obviously require much more beneficiation than does DSO hematite.

ELM has approximately 2 billion tonnes of carnallitite and sylvinite combined in the measured, indicated and inferred categories using a cut off figure of 10% K2O. Lets say IGV of $2 per tonne as a take over figure. I think this has to be conservative and not taking into account the potential of Dougou. So that brings us to a figure of around $4 billion dollars in ground value.

Current share price is approx 0.66 with a market cap of $154 million. So to reach a market cap of $4 billion we need to multiply the current share price by 25 which gives us a share price of $16.50. If you want to use $1 per tonne IGV then you still get $8.25.

Now I can see why some of these Canadian producers have market caps of 17 to 35 billion dollars. I still think my estimate has been ultra conservative.