Thanks fairchij
I also spoke with a knowledgeable colleague today who was very close to the bidding process in 95/96 re Voisey's Bay. Both Inco and Falconbridge based their bids on more or less the same scenario. A very large mining/processing rate, considerable higher than the current 1.6Mt/yr, and projected 2.6Mt/yr, and a stand-alone smelter/refinery complex at the site. Environmental concerns raised after completion of the Inco/Diamond Fields agreement, imposed constraints on the mining rate at significantly lower levels then that assumed during the bidding process.
The property valuations were based primarily on conventional DCF analyses, with the usual assumptions re future metal prices, etc. The basis for the analyses was not the 43-101 resources of the Ovoid alone. The calculations were done on the basis of +100Mt on the property and then a bid value calcuated. The expected rate of return considered acceptable was perhaps on the low side with "unconventional" high bids submitted in order to circumvent other competitors from getting a foothold into what could shape up to be a world-class mining camp. Both Falconbridge and Inco felt that Voisey's Bay could keep them at the low end of the cost curve in the future.
Hence, using a % of gross in-situ metal value to determine the value of NOT's property, to a would-be suitor, should be used with caution.