Hoov,
I have two concerns with your valuation (unfortunately I am using the same one so I obviously don’t know the solution). The first if my numbers are correct (See Below) you used the 20% cut off to calculate the value per tonne of chromium as valued by the Cliff Takeover of FWR. My problem is assessing what a realistic cut off grade is for Chromium, if this was a Nickel, Zinc or Copper mine it would be fairly simple to come up with a reasonable figure. The 15% Cut-off used the Big Daddy number included a band of waste that from my understanding could be removed before sending ore to be processed. I included a rough calculation of Cliff’s value of Chromium at a 25% cut-off at Black Thor.
The second is the assumption that Cliff’s was aware of the size of Big Daddy before making an offer for FWR, again I understand why you made the assumption I just don’t know if it is accurate.
Note: There could be mistakes in these calculations, they were completed in 15 minutes because I could not find my old spreadsheet.
Disclosure: I have a position in SPQ, I made a set of assumptions that may or may not be correct
| |
|
Tonnes (million)
|
Grade
|
Tonnes CR(mil)
|
|
|
|
|
|
Big Daddy
|
Inferred
|
23.2
|
0.4066
|
9.4
|
|
Outstanding Shares SPQ
|
476,336,465
|
|
| |
Indicated
|
16.3
|
0.3909
|
6.4
|
|
FWR Take over
|
$ 675
|
Million
|
| |
|
|
Total
|
15.8
|
Value
|
$ 314,848,649.48
|
|
|
| |
|
|
SPQ BD
|
4.2
|
|
$ 83,434,892.11
|
|
|
|
Black Thor
|
20% cutoff
|
121.9
|
0.278
|
33.9
|
|
19.92 $/t
|
|
|
| |
|
|
CLF BD
|
7.4
|
|
|
|
|
| |
|
|
Tonnes with BD
|
41.3
|
|
16.34 $/t
|
|
|
| |
|
|
|
|
|
Value of SPQ
|
|
|
| |
|
|
|
|
|
|
Without Big Daddy
|
0.18
|
| |
|
|
|
|
|
|
With BD
|
0.1436643
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
Tonnes
|
Grade
|
Tonnes CR(mil)
|
|
|
|
|
|
Big Daddy
|
Inferred
|
23.2
|
0.4066
|
9.4
|
|
|
|
|
| |
Indicated
|
16.3
|
0.3909
|
6.4
|
|
|
|
|
| |
|
|
Total
|
15.8
|
Value
|
$ 480,810,246.47
|
|
|
| |
|
|
SPQ Portion
|
4.2
|
|
$ 127,414,715.31
|
|
|
|
Black Thor
|
25% cutoff
|
69.6
|
0.319
|
22.2
|
|
30.42 $/t
|
|
|
| |
|
|
|
7.4
|
|
|
|
|
| |
|
|
Tonnes with BD
|
29.6
|
|
22.79 $/t
|
|
|
| |
|
|
|
|
|
Value of SPQ
|
|
|
| |
|
|
|
|
|
|
Without Big Daddy
|
$ 0.27
|
| |
|
|
|
|
|
|
With BD
|
0.2003983
|
