via Calculator Soup

I am presenting two 5-year production scenarios using the net present value calculator at Calculator Soup, but the terms are in ounces of gold, not dollar figures.

The first one is five years producing 40000/year at a discount rate of 50%, which looks like what the company is presenting, while the second scenario is five years at 80000/oz. per year at a 25% discount rate.

In the first one production was initiated six months in advance before commercial production was declared, with 20000 oz. was prepaid, while the second scenario has 40000 of ounces prepaid in advance.

Half the production was used to prepay operational cost in the first scenario, while the second scenario, a quarter of the ounces produced were used to prepay costs.

Answer:

For the Cash Flow Series
NPV = $120,246.91

Cash Flow Stream Detail

Answer:

For the Cash Flow Series
NPV = $292,544.00

Cash Flow Stream Detail

source: http://www.calculatorsoup.com/calculators/financial/net-present-value-calculator.php

The conclusion you would reach is that even at the production figures presented by the company, there are a surplus of ounces held in escrow. (Or formerly held without declaring it in the balance sheet.)

The first scenario would have raised ~$182m.($163m. with a 10% discount) if they settled on Friday, in the first phase of production covering five years preparing for an expansion which has been in the planning phase on the books since 15 years.

This is a 'hope' stock only in the sense that they hope nobody else figures it out before they implement their expansion plans, and have cached away hundreds of millions of production figures off the books.

- F6