Hello Panamax,

Your post says: "In the case of ZEN it is best to have low expectations and then be surprised to the upside. For far too long we have had grand expectations only to be let down."

Fully agreed with you on this philosophy. It would be best not to have lofty expection by assuming some extemely optimistic numbers for resource estimate (in the order of 100M tonnes ore at max high grade), and price of graphite of the range of $20,000 to $30,000/tonne. This is simply unrealistic and would risk a fall when things would turn out not as rosy as expected. Roth's values are good starting point. But, we would know that there is quite a bit of conservatism in their estimate. Let's face it $8000/tonne is a very good price. And as I have indicated in previous posts, a production of 50,000 tonne/yr coupled with $8000/tonne would yield a very healthy profit for a small company like ZEN. If there is a demand, then the plant could be scaled up to take advantage of this demand (double the profit).

For ZEN I would leave the inferred amount aside in the evaluation (leave it there for a potential upside). Similarly, it would be more conservative by using the FD number of shares. The price could be assumed to be even less than $8000/tonne (say $5000/tonne max). If we can make a net profit of something like $2000-4000/tonne (assuming a production cost of $1000/tonne, which could be very conservative) then the profit would still be plenty (hundreds of M of dollars). Anything better than that would be considered as gravy on the top, or as you said "...then be surprised to the upside".

goldhunter