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KRO Outcome Visualization Project Index
An Outcome Visualization Project is an attempt to visualize the potential outcome of an exploration project in terms of both what the deposit might look like and what it might cost to mine. The goal is to define one's expectations with regard to an uncertain outcome and quantify its potential value so as to enable the placing of high risk high reward bets on publicly listed resource juniors that have earlier stage projects for which an economic study has not yet been published. This requires making assumptions with regard to about 30 variables that define the deposit and the costs to mine it. These assumptions are run through the discounted cash flow model using life-of-mine averages to generate the after-tax NPV and IRR figures the mining industry uses to value a project. The discount rate used to calculate the NPV is derived from the risk levels the visualizer assigns to each of a set of risk factors. The visualized outcome is in turn adjusted to a fair speculative value range based on the exploration stage of the project using the uncertainty ladder that forms the basis of the rational speculation model. The OV Chart also includes a Market Speculation Value channel which mimics the "irrational" tendency of market valuations to overshoot the fair speculative value during the target testing to PEA delivery stages while the ultimate outcome is most uncertain but remains open to the imagination. This is the famous Market Cycle S Curve which kills the shorts during a discovery play and tortures the value hunters later in the development cycle when the project typically trades below its fair speculative value until it finally achieves production. The visualized outcome is recalculated every day using prevailing metal prices. It is essential to understand that the assumptions behind an OV are best guesses based on the available published information about a project and the visualizer's broader understanding about the risk factors and mining costs. As such an OV is subject to revision as new information becomes available which may have positive or negative implications for the visualized outcome. An OV is intended to bridge the gaps between the publication of 43-101 reports that provide resource estimates and economic studies signed off by qualified professionals. Once a new resource estimate or economic study has been published by the company all open outcome visualizations become obsolete and the OV Project is closed. The OVP Index is a list of all projects for which KRO has undertaken an outcome visualization. The name of the OV Project links to an unrestricted summary report for the project which includes a link to the Outcome Visualization report that details the outcome assumptions and is restricted to KRO members. An OV Project can have multiple OV's, but only one can be current. The current OV is archived when a new OV is posted. The first ipv chart below plots the market spec value ( S Curve) and fair spec value channels in terms of project outcome value in 100% terms. The second chart portrays the MSV and FSV for the project outcome in stock price terms where fully diluted and net project interest are assumed constant.

Outcome Visualization related Resources
KRO is in desperate need of updated explanations of how the rational speculation model works, but the links below to older articles will have to suffice for now. The main thing to grasp is the uncertainty ladder defined by the exploration-development cycle of a resource project. The exploration-development cycle is an information gathering process that starts with the highest uncertainty at the grassroots/conceptual stage and gradually constrains the physical nature of a deposit and its cash flow generating capacity as an operating mine. If you understand that knowledge about a potential outcome undergoes a reduction of uncertainty with each stage of the cycle, and recognize that this results in a shrinkage of the range in which the potential outcome's value can fluctuate, then you can appreciate why outcome visualization within the context of the rational speculation model is the key to gambling on resource juniors before they achieve the stage of a delivered economic study.
Rational Speculation Model: an IntroductionAn older article (it uses diamond exploration as an example) that explains the "difference" between gambling and betting on publicly trade resource ventures.
Rational Speculation Model: 3 Step Application to Mineral PlaysMore detailed description of the rational speculation model - note that the concept of a "probability" ladder has now been replaed with the idea of a "uncertainty" ladder, though the stages and probability/uncertainty rainges remain the same.
RSM applied to Diamond PlaysThe inspiration for the rational speculation model came from my experience of the diamond boom during the nineties where we analysts struggled to understand the valuations the market assigned to Dia Met and the field of diamond area play juniors.
PDAC 2009 Diamond Technical Session: a market pricing model for publicly traded diamond exploration companiesThis presentation takes a detailed look at how the implied project values ranged during each of the exploration stages for a number of major diamond juniors such as Dia Met, Aber, Tahera and Winspear.
43-101 Economic Study based Operating Rates(KRO Members Only) List of operating rates and associated USD capital and operating costs reported through published 43-101 economic studies. Grouped by mining type (ISL, Open Pit, Open Pit/Underground, Underground) and sorted by daily operating rate in descending order for each group. Includes links to supporting technical reports.

OV Project: Azimut - Eleonore South
Location: Canada, Quebec, James Bay
Stage: 2-Target Drilling (Gold)
Project OV posted: Sep 8, 2016, Current OV: Sep 8, 2016
OV Project: Canalaska - West McArthur
Location: Canada, Saskatchewan, Athabasca Basin
Stage: 2-Target Drilling (Uranium)
Project OV posted: May 17, 2016, Current OV: May 17, 2016
OV Project: Eskay Mining - Corey as Eskay Creek II
Location: Canada, British Columbia, Northwest BC
Stage: 2-Target Drilling (Gold Silver Copper Lead Zinc)
Project OV posted: Apr 25, 2017, Current OV: Apr 25, 2017
OV Project: Eskay Mining - SIB-Lulu as Eskay Creek II
Location: Canada, British Columbia, Northwest BC
Stage: 2-Target Drilling (Gold Silver Copper Lead Zinc)
Project OV posted: Apr 6, 2017, Current OV: Apr 6, 2017
OV Project: Highway 50 - Monroe
Location: Canada, British Columbia, Southeast BC
Stage: 2-Target Drilling (Zinc Lead Silver)
Project OV posted: Apr 11, 2017, Current OV: Apr 11, 2017
OV Project: Peregrine - Chidliak CH6-7
Location: Canada, Nunavut, Baffin Island
Stage: 6-Prefeasibility (Diamond)
Project OV posted: Oct 28, 2015, Current OV: May 20, 2016
OV Project: Sirios - Cheechoo
Location: Canada, Quebec, James Bay
Stage: 3-Discovery Delineation (Gold)
Project OV posted: Apr 21, 2016, Current OV: Apr 29, 2016
OV Project: Uravan - Outer Ring
Location: Canada, Saskatchewan
Stage: 2-Target Drilling (Uranium)
Project OV posted: Jun 27, 2016, Current OV: Jun 27, 2016

United States
OV Project: Arizona Mining - Hermosa-Taylor
Location: United States, Arizona
Stage: 7-Permitting & Feasibility (Zinc Lead Silver Copper)
Project OV posted: Feb 29, 2016, Current OV: Apr 3, 2017
OV Project: Nevada Expl - Awakening
Location: United States, Nevada, Humboldt County
Stage: 2-Target Drilling (Gold)
Project OV posted: Oct 21, 2015, Current OV: Oct 21, 2015
OV Project: Nevada Expl - Grass Valley
Location: United States, Nevada, Cortez Trend
Stage: 2-Target Drilling (Gold)
Project OV posted: Oct 4, 2015, Current OV: Apr 25, 2016
OV Project: Nevada Expl - Kelly Basin
Location: United States, Nevada, Battle Mountain Trend
Stage: 2-Target Drilling (Gold)
Project OV posted: Oct 23, 2015, Current OV: Jul 4, 2016

OV Project: Peregrine - Sikwane
Location: Botswana
Stage: 2-Target Drilling (Diamond)
Project OV posted: May 25, 2016, Current OV: May 27, 2016
OV Project: Tsodilo - BK16
Location: Botswana
Stage: 5-PEA & Bulk Sampling (Diamond)
Project OV posted: Dec 13, 2016, Current OV: Dec 13, 2016

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