Many members are now aware that there are a variety of methods used by analysts to "predict" share prices. I am not going to get into a debate as to which one or ones are better. However, as this seems to be a topic of much interest, especially in today's posts, I would like to offer one scenario. Please do not shoot the messenger!
My analysis will be based on what Inco paid for Voisey's Bay in 1996 and assumes that that figure was +-$4.3B for 100% control, less the 3% NSR.
Lets assume Inco made their bid only on the basis of the 43-101 for the Ovoid-31.7Mt @ 2.83% Ni, 1.68% Cu and 0.12% Co. Using metal prices from early 1996, the gross in-situ metal value of the Ovoid was approx $37.8B at that time. The $4.3B price represents approx 11% of the gross in-situ metal value of the Ovoid.
Now lets look at NOT's DE1. Lets assume that for argument that the 43-101 is 5Mt @ 2.1% Ni, 1.1% Cu, 1.6 g/t Pt, 4.0 g/t Pd and 0.2 g/t Au. Lets further remember that this is a rough estimate only and should be used as a "ball park" figure for discussion purposes only. Using current metal prices, the gross in-situ metal value of DE1 would be $4.5B. 11% would be $495M. On a per share basis, assuming NOT's fully diluted shares to be approx 128M, DE1 would be valued at $3.87/sh.
Other considerations of course have to be made for the value of NOT's other properties, etc.
Please remember, that this is only one way of potentially valuing the impact of DE1 on NOT's share price. I look forward to comments, positive or negative. Please check my math at least.
My personal conclusion is that I have no intention of selling my shares as I still think that DE1 is still only the tip of the iceberg.
Cheers
geoprof
