Goaweigh wrote: Firstly must thank SASKEXPRESS on the CEO board for posting this.
It's a huge report and very informative.
The one tiny bit of information I can't find however, is his estimated payout to the NSR holders so I thought I'd do a bit of # crunching just for fun.
He shows net revenue of US $ 1,784,000,000 on gold sales of 1,115,000 Oz. ( staggering )
Operating costs are US $ 414,000,000 which are the only costs that should effect our NSR, the others mentioned such as Depreciation and Corporate G&A don't apply to the NSR so our net should be 2 % of the remaining cash flow of US $ 1,370,000,000 which equals
US $ 27,400,000 and if you give that a multiple of 10 you get US $ 274,000,000 and if you divide that by the 12,000,000 shares of the NSR spinco you get US $ 22.83 per share.
That converts to C $ 30.58
Now just to add in a bit more math if you take the number of spinco shares you own and multiply those by C $ 30.58 and then divide that by the number of GBR shares you own, then you should get C $ 7.65
Which means that if the analysts target price for GBR is C $ 16.50 and he were to go through the same exercise I just did for the NSR Spinco shares and agreed with my numbers then we ( those of us who own both classes of shares ) should see a combined value of
C $ 16.50 ( GBR ) plus C $ 7.65 ( GBR Royalty ) = C $ 24.15
Now just to add even more math, the analyst has added in 65,000,000 shares to our 54,000,000 shares increasing them to 119,000,000 to cover financing costs to build a mine so at C $ 16.50 that's adding $ 1,040,000,000 in dilution so if we believe we will be taken out before we build a mine then that would mean he's giving us a valuation of 119,000,000 X
C $ 16.50 = C $ 1,963,500,000 and if you divide that by 54,000,000 you get C $ 36.36
So that must be his current thinking on a takeout price. Add in our GBR Spinco shares at
C $ 7.65 and you get C $ 44.00
Something to chew on anyway !
Cormark Report