Your numbers are half way there Webgogs. You just need to factor in what the mine is worth today. The bottom of SC won't be seen for more than 25 years. Calculate the yearly income in metals, subtract the mining costs and discount each year for 25 years.
Say, using if we use your metal prices, RE metal recoveries and metal selling costs etc, we are left with a Net Revenue is $550M a year for each full year you mine (360 days a year).
Discounting the sum $550M over 25 years at 8% leaves you $80M for that final year. In other terms. A person using NPV will say that that $550M income in year 25 is only worth $80M to me know if i were to buy it.
Starter Pit and Capex can make a signficant difference
Using $550M Net revenue for each year.... And $3B even spent over 4 yrs prior to mining....
Yr Net Revenue (NPV)
-4 -$300,000,000
-3 -$600,000,000
-2 -$900,000,000
-1 -$1,200,000,000 (Total of $3B)
1 $509,411,462 (I discount this year when it probably should be Zero => add $50m)
2 $471,677,279
3 $436,738,222
4 $404,387,242
5 $374,432,632
6 $346,696,881
7 $321,015,631
8 $297,236,695
9 $275,219,162
10 $254,832,558
11 $235,956,072
12 $218,477,844
13 $202,294,300
14 $187,309,537
15 $173,434,757
16 $160,587,738
17 $148,692,350
18 $137,678,102
19 $127,479,724
20 $118,036,781
21 $109,293,316
22 $101,197,515
25 $80,333,850
24 $35,571,829 (partial year)
Total NPV $2,727,991,477
http://en.wikipedia.org/wiki/Net_present_value
