|
|
The Company
The Company
History
Geology
Work Progress
Mining Sequence
Behre Dolbear
Independent Valuation
Management Team
Industry
The Market
Partners
Thunder
Bay Office
|
Behre Dolbear
In February, 2009, Behre Dolbear & Company (USA), Inc.
completed an Independent Review and Valuation of Bending Lake Iron Group
Limited’s Iron Ore Development Project, Bending Lake, Ontario.
At that time, Bending Lake’s plan was to produce merchant pig iron.
Although the current plan is to produce pellets instead of pig iron, Behre
Dolbear’s findings on the pig project are helpful.
Behre Dolbear’s findings were that:
-
Using the Market Related Transaction (MRT) valuation method
the deposit has a present value of $33.6 million.
-
The scoping Income (cash flow) valuation method, using a
pig iron price of $400 per tonne and a discount rate of 14%, gave an NPV
of $212.9 million, an IRR of 20.37% and a net income after taxes of $5.1
billion. The ratio of net income after taxes to Capex ($833.6 million)
for the project is 6.1 to 1.
-
Assigning a 75% weighting to the MRT method and a 25%
weighting to the Income method resulted in a valuation of $78.4 million.
As the project advances through the feasibility study, this weighting
would likely change.
-
Project Risks: Behre Dolbear’s rating of the degree of
risk in the major areas of the project are:
|
a. |
Resources:
Low |
|
Low |
|
|
|
b. |
Mining
Operations: Low |
|
Low |
|
|
|
c. |
Processing/Concentrating: Low |
|
Low |
|
|
|
d. |
Processing/Pig
Iron Production: Moderate |
|
Moderate |
|
|
|
e. |
Processing/Tailing
Disposal: Low/Moderate |
|
Low/Moderate |
|
|
|
f. |
Infrastructure: Low |
|
Low |
|
|
|
g. |
Environmental
and Socio-economic Aspects: Low |
|
Low |
|
|
* The final
report “Preliminary Review, Valuation and Cash Flow Projection, Bending Lake
Iron Ore Deposit and Bending Lake Project” can be made available upon
request. |
|
