According to CUU Investor presentation (http://www.copperfoxmetals.com/i/pdf/CUU-PP-Sep-22-2014.pdf) our portion of the Net Cash Distribution for years 6-21 is an average of $113 million/year. So I got thinking - How would the economics look if we never tried to sell our portion?
And since many feel like they are missing out on other investment opportunities. So how would it compared to a perfect investment that paid out a high amount each year?
And finally the average share price paid by investors varies quite a bit. Generally the longer you have been invested, the higher your average share price.
I will use 25 year time frame. This allows 5 years for the mine to be built, and 5 hours for the payback of the $3.2Billion capex. Then an 15 years of dividend payments.
If Investor A could take $10,000 and compound it at:
8% After 25 years he would have $68,485
9% After 25 years he would have $86,231
10% After 25 years he would have $108,347
11% After 25 years he would have $135,855
12% After 25 years he would have $170,001
14% After 25 years he would have $265,619
....
....
Our dividend payments for years 11-25 would be about $0.2825/share ($113 million / 400 million shares). I will use a 25% tax rate so that we only net $0.2119/share
Now Investor B, he only recently heard about Copper Fox and invested $10,000 at average cost of $0.25/share. So that he has 40,000 shares.
He has no growth at all for 10 years... but then his dividend kicks in and he can invest that at 8%. He now has $259,486 - this is equivalent to the 14% investment.
|
25% Tax |
| 11 |
$18,475 |
| 12 |
$28,428 |
| 13 |
$39,177 |
| 14 |
$50,786 |
| 15 |
$63,324 |
| 16 |
$76,865 |
| 17 |
$91,490 |
| 18 |
$107,284 |
| 19 |
$124,341 |
| 20 |
$142,764 |
| 21 |
$162,660 |
| 22 |
$184,148 |
| 23 |
$207,354 |
| 24 |
$232,418 |
| 25 |
$259,486 |
...
...
Now Investor C, has been involved with Copper Fox for a couple of years and invested $5,000 at average cost of $1.00/share. He has purchased more shares as the price has dropped. He purchased another $5,000 at an average cost of $0.35. So that he has 19,286 shares. So that he has 19,286 shares at an average of $0.52/share.
He has no growth at all for 10 years... but then his dividend kicks in and he can invest that at 8%. He now has $140,320 - this is equivalent to the 11+% investment.
|
25% Tax |
| 11 |
$14,086 |
| 12 |
$19,299 |
| 13 |
$24,929 |
| 14 |
$31,010 |
| 15 |
$37,577 |
| 16 |
$44,669 |
| 17 |
$52,329 |
| 18 |
$60,601 |
| 19 |
$69,535 |
| 20 |
$79,184 |
| 21 |
$89,605 |
| 22 |
$100,860 |
| 23 |
$113,015 |
| 24 |
$126,142 |
| 25 |
$140,320 |
...
...
Now Investor D, has been involved with Copper Fox for a quite a few years and invested $5,000 at average cost of $1.60/share. He too has purchased more shares as the price has dropped but only another $5,000 at $0.70/share. So that he has 10,268 shares at an average of $0.97/share.
He has no growth at all for 10 years... but then his dividend kicks in and he can invest that at 8%. He now has $88,441 - this is equivalent to a 9+% investment.
|
25% Tax |
| 11 |
$12,176 |
| 12 |
$15,325 |
| 13 |
$18,727 |
| 14 |
$22,400 |
| 15 |
$26,368 |
| 16 |
$30,653 |
| 17 |
$35,280 |
| 18 |
$40,278 |
| 19 |
$45,676 |
| 20 |
$51,506 |
| 21 |
$57,802 |
| 22 |
$64,601 |
| 23 |
$71,945 |
| 24 |
$79,876 |
| 25 |
$88,441 |
Even this last case is still a decent return. While it does have rosy assumptions like reinvesting your money at 8% ... but hey it is comparing to investments doing that return.
Here is the kicker... We haven't yet INCLUDED:
1. Optimization improvements to SC which we know exist. This will improve the numbers considerably.
2. Arizona
3. Carmax
