Ely Gold Royalties Inc ELYGF

Trading Multiple of Forecast Revenue

[energee]

Using the $0.84 close on Valentines Day, this one is now trading at ~25X Co. forecast 2020 revenue (using current basic shares of 111.3M; hard to decipher when the warrants will be exercised with the control issue and not sure if Jerritt Canyon new shares included but can't be yet) as shown in their February 2020 presentation. Revenue is defined as sales (ie. claim option receipts, property sales and sale proceeds from third-party stock) plus royalty revenue ("transactions") which shows a total "forecast" of $1.8M for 2019. Page 23 left axis graph must start at the mid-point of 2020 because, unless I'm missing something, Fenelon is not yet in production and the presentation shows that Fenelon NSR contributing the second biggest forecast revenue wedge to the Co. for 2020.

They now plan to issue $8M in stock @ $0.63 (12,698,413 new shares) for a .5% NSR from Jerritt Canyon, subject to approvals in May 2020 and further DD. The page 23 slide looks like they forecast ~$1MM of 2020 revenue from this .5% NSR, if approved.  Nice run-up for the very sophisticated vendor who liked the deal at $.63 and likes it even more now.

From ELY NR dated January 30, 2020 " We are very pleased by the continuation of the excellent Fenelon drill results being reported on by Wallbridge. Ely’s 2% Fenelon NSR will be a cornerstone of our royalty portfolio as we expect Wallbridge to receive its mining permit in late 2020. With current infrastructure reaching six levels, (refer to “NI 43-101 Technical Report on the Feasibility Study for the Fenelon Property” effective date February 2, 2017), we could potentially receive royalty income from Fenelon late this year. This will be a transformative year for Ely, as it is now receiving cash generation from two royalties; the Jerritt Canyon per ton Processed Royalty and the 0.75% gross revenue royalty on the Isabella Pearl Mine operated by GORO Resources. The recently announced Regent Hill net profits interest is also expected to begin cash generation in late 2020 (refer to news release, December 18, 2019).”

Tried to find a reason to buy this one a few weeks ago at $.60 but missed it - hard to chase it now at $0.84. 

Good luck to all.