After this humble corner of cyberspace did some ‘splainin’ to Peter Arendas, self-appointed expert on mining numbers and stuff over at Sinking Alpha, somebody pointed out the post and he decided to act…and comment:
Author’s reply »Yes, I made a mistake and only mechanically
decreased the NPV by 5%. Although I reflected the impact of the royalty
sale on the attributable gold production and AISC, I neglected the total
impact of the royalty sale on the NPV. After I used the gold price of
$1,300 and the new 5% NSR in Victoria’s NPV model presented in their
feasibility study, the resulting after-tax NPV(5%) should be around $370
million (I’m not familiar with the Canadian tax system enough to
determine the exact impact of the royalty sale and the 2017 tax changes
on Victoria’s tax obligations which means that the actual number may
differ slightly). I submitted a correction of the related numbers, it
should be visible soon.I apologize for the
mistake, however, I must say that I absolutely don’t like the blog
author’s arrogant writing style. If someone makes a mistake, you can
notice him also without personal attacks, in a more cultivated way.
Oh the poor dear, has no trouble about spouting BS, pumping stocks in public forums using false information and potentially leading thousands of naive sheep up the proverbial garden path, but doesn’t like his thin skin being pierced. Well Peter, it’s true I’m an arrogant piece of crap but it’s also true that I’m not nasty and horrible to just anyone. I save that for people who deserve it, such as you because you may think you’ve fixed your BS anal ysis now but it still wildly overestimates the NPV of Victoria Gold (VIT.v). This is one reason I asked you whether you actually know what NPV stands for.
You are seriously telling us that the Eagle project will be built for CAD$370m? They’ve just raised CAD$505m, didn’t you see that? Well in fact you did and somebody else pointed it out to you in the comments section, but lo and behold that fact didn’t fit your prejudices so you were moronic enough to defend your position with “Well they might not spend all that cash on the capex”! Dude, have you ever met a mining company CEO in your life?
A few facts for you, Peter:
1) VIT raised C$505m to build Eagle because they need C$505m to build Eagle. Period.
2) That C$370m (U$288m) number you seem to be fond of is a work of fiction, made up by JDS and published in cahoots with VIT. It’s fraudulent. One of these days JDS is going to get slapped with a lawsuit and go bankrupt after losing the case, because they do this shifty move all the time and you’re simply a fool if you haven’t noticed it yet
3) As they’ve already spent C$38.4m on Capex at Eagle in 2017, you’re staring down the barrel of a C$543m capex project here. And even that may turn out to be generous, because I’m not including the $20m contingency bridge loan they’ve set up or their treasury position.
4) And here’s how I framed that fact to subscribers of The IKN Weekly last Sunday evening in IKN460: “That’s an overrun of C$173m, or a whopping 46.75%. And as according to JDS every 5% extra spent on capex means C$27m less on the NPV, the subtraction is C$252.45m“.
5) Got that, Peter? Y’see, the problem is that you cannot simply ignore a capex overrun. You can try of course, you can even publish about it (either due to dumbass ignorance or nefarious reasons, I’m going to assume the best of you and say you’re the former) but don’t start whining when your gross errors and miscalculations are brought in front of your eyes.
6) So let me help you with the next correction you need to make to your utter work of fiction. You’re claiming a U$370m NPV for VIT.v at U$1.3k/oz gold. You’re going to need to subtract around U$197m from that now. And that means your NPV per share is down to 22c. And you’re looking really stupid now.
Have a nice day, Peter.