ytc - one of rbs morgans top 5 picks, page-5

@arguls

You seem to forget that Hera is mostly a gold/silver project. And for the first three years or so, Nymagee will run as a open cut operation with very low capex and low operational costs.

Look at this report by Argonaut (with site visit and number crunching).
http://www.ytcresources.com/public/documents/4/11/110713%20YTC%20Resources%20(YTC)%20-%20Site%20Visit.pdf

Gives a valuation of only 0,76 Au$ (current SP: 0,55 Au$)
BUT: The basis for their calculation is long time (10y) prices of only
- US$ 1000 for gold and
- US$ 2,5 for copper.

Cahs costs used in the report are US$ 676 and US$ 1,50 (wait for DFS for better numbers); so higher prices improve profit a lot once they are above that level.

If you use their numbers:
US$ 1000 - 676 = US$ 576 profit / ounce for gold and
US$ 2,5 - 1,5 = US$ 1 profit / pound for copper.

At current spot prices
US$ 1726 - 676 = US$ 1050 profit / ounce for gold ! and
US$ 4,1 - 1,5 = US$ 2,6 profit / pound for copper !!

Bullish scenarios:
US$ 2000 - 676 = US$ 1324 profit / ounce for gold and
US$ 5,0 - 1,5 = US$ 3,5 profit / pound for copper.

So, at current or higher prices earnings from copper will be roughly 2,5-3 times higher than expected by the report.

If, otoh, the world economy tanks and QE3 comes into play, gold prices will go up to US$ 2000 or more and they will make a killing with Hera ...

Nice inbuilt hedge, isn't it?