Value Matrix

There is a significant update on the CH-6 resource coming up over the next few months.
It is a good time to show the significant of what CH-6 brings to chidliak.

The first matrix below shows all the relevant information for CH-6.
This includes tonnage, grade, exchange rate and various valuation model categories (min, max, etc.)
There have been 2 historical points in time and the third point in time will be approaching in the first few months.

This second matrix below shows the in-situ value at the various points in time for the various categories.
Given the fact that the upcoming PEA (preliminary economic assessment) is in Canadian $$'s for costing, it makes sense to look at the potential revenue stream in Canadian $$'s as well.
Even though there has been a drop in diamond prices, most of that has been in US $$'s and hasn't had a big effect in Canadian $$'s

There was an opportunity to do a PEA after the first point in time and that opportunity was passed. The revenue opportunity at the time was about CAD$1.5 billion.
Another opportunity to do a PEA was after the second point in time and that was opportunity was also passed. The revenue opportunity at the time was about CAD$1.9 billion.

Approaching the third point in time and the PEA has been given the greenlight. The estimated revenue opportunity is somewhere between CAD$2.4 and CAD$2.5 billion if the basecase is to be used. The average is a bit higher at between CAD$2.7 and CAD$2.8. The price that is used will be up to the independent QP (qualified person) in conjunction with Peregrine Diamond's technical staff and what they all agree to as a reasonable expectation for a PEA level study.

This PEA has also been given the greenlight because CH-7 will coming out with a maiden inferred resource that should be included in the PEA assuming the valuations do create some profit margin at CH-7. If not, it will all be up to the revenue stream from CH-6 to make a profitable PEA.

CAD$2.5 billion will be multiples of the capital cost of the project and multiples of the cumulative operating cost throughout the project. However, one must wait for the actual PEA to confirm this.

No comments:

Post a Comment