Wengfuyoung, Do you know what net present value means? If someone believes the true net present value of a company is $0.25, by definition it means they will buy it ...for 25 cents but still, by definition, a positive NPV means it is better than other investments available and will add value. So as long as a company has an NPS greater than zero, funding is not an issue. The only questions is really, how accurate is the feasibility study.

Typically, most mining companies trade a little higher than the NPS. I gave the example of Minemakers, on the ASX, which is today trading above the NPS that was announced by the company last year (above the standard not best case feasibility scenareo).

Net present value adds up all the revenues over the life of the mine. Next, subtract from that ALL costs: cost of financing any loans including interest payments, operating costs, startup capital costs, equipment costs, cleanup costs, all taxes, etc.. This gives the total NET profit the company will make over the life of the mine.

Next subtract from this total the risks with a reasonable discount rate. This means, over the period of the life of the mine, calculate how much money would one make investing in a safe instrument like a government bond and subtract it. Legend used an 8% discount rate, three hundred basis points greater than than current 30 year treasury rate of about 5%. Show me a safe 8% rate of return for 30 years, just try. So the nps is ...how much additional value over a safe investment is the company worth (just for that one mine)?

Also, remember that we're levered to the price of phosphate. So if rock prices increase 20% (while the cost of mining stays the same) our margin nearly doubles. This means the value of the company would double. The trouble is recently energy costs are also increasing very fast and cost of mining is also going up, thus margins aren't going up as fast.

So again, either were trading for a dime on the dollar or we're missing something. I'd like to verify that all management costs as well as cleanup costs / environmental costs have been included in the calculations. A lot of times, miners don't consider the environmental cost implcations of the operations which can be pretty significant. Even that alone wouldn't dent our margin of safety.

for reference:

http://qmarks.wordpress.com/2010/10/03/how-to-value-a-mining-company/

http://www.duke.edu/~charvey/Classes/ba350/project/project.htm