conservative estimate of RCG's value
I have been looking for a conservative estimate of RCG's value.
It is easy to come up with black friday numbers that slash everything by, say, 50%.
I am looking for a number that reflects the business value before the red tag days or before post sale mark-ups.
I think the quarterly reports tell the story.
Between June 2017 and Sept 2018 RCG undertook an underfunded bulk-sampling program.
The result was $8M of gold mined. The prevailing sentiment is it could have been a lot better. I won't dwell on what went well and what didn't. It has been covered before and does gives us any numbers.
Regardless of the outcome the accounting rules added value to the development property.
Detractors might say that the mining efforts are just costs and not improvements.
RCG has not written down the "improvements".
That would result in unjustified tax credits.
Perhaps, the value of the shareholder equity is too high.
Below is a conservative estimated of RCG's. It retains all the value before bulk sampling, discounts all improvements made during bulk sampling and includes all the liabilities to incurred to date.
business value of RCG as of Dec 2018
25.1M assets (as of June 2017)
- 18.3M liabilities (as of Dec 2018)
= 6.8M shareholder equity/175M shares or 3.88c/sh $CAD
It is a ballpark number at best.
It does some things well others badly.
It includes the dilutions from 123M shares to 175M shares.
It discounts all improvements of bulk sampling.
It does not include the full value of reclamation bond.
It counts Corcoran as an asset but not as a liability.
The market values of the gold in the ground remain unchanged.
Does not include interim financing of the NOI.
The tax-credits remain at $20M.
It is just a sketch.
It is not intended to be an estimate of a deal.
Some might say my knife is too sharp.
Others might say it is too dull.
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Notes:
June 2017
25.1M assets
- 16.6M
=8.5M shareholder equity/123M shares = 6.9c/sh
Dec 2018
31.3M assets
- 18.3M liabilities
= 13M equity/175M shares or 7.42c/sh $CAD
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