Orea Mining: What Is A Billionaire Backed Company With $2.2 Billion Of High Grade Gold Worth? $23 Million?
Summary
- Orea Mining's Chairman is Robert Giustra, their partner on MONTAGNE D’OR JV - French Guiana, is NordGold controlled by Russian Billionaire Alexei Mordashov.
- The mine to be built is very high grade for a big pit, Reserves of 2.75 million ounces gold (54.11 Mt @ 1.58 g/t gold). Orea owns 45%.
- A new wrinkle, 10-22-2021. Nordgold files Lawsuit Valuing its 55.01% of Montagne d'Or Gold Project at US$4.6 Billion against France.
- Curiously Nordgold has set themselves up to pay Orea a lot more ($3.76 billion) if they buy them.
- Orea market cap is $23 million. Is this the mostly interesting sub $25 million company in world? Gets my vote.
Orea Mining: What Is A Billionaire Backed Company With $2.2 Billion Of High Grade Gold Worth? $23 Million? (OTCMKTS:OREAF) | Seeking Alpha
Did Mordashov Set Himself Up To Pay Billions To Buy Orea Mining?
How could he do that for a company valued at $23 million today? By launching an international lawsuit that claims his 55% is worth $4.6 billion with all sorts of evidence presented to prove that? Would he did something like that? Ah yes, he has done just that!
He has valued Orea Mining at $3.76 Billion in official court documents. Nordgold has a history of buying out their JV partners just before going into operation. Did he not think of this?
Lets say Orea was going to give him a bargain and let him off the hook by selling for just $1 billion. What is that for the stock? It would be a 43 bagger. If they sell to Alexei Mordashov for the price he has set, then it would be a 163 bagger. This is rather amazing aspect of the most interesting $23 million market cap company in the world. Did you notice that Orea let everyone in the world know about this with their PR?
Conclusion:
Orea Mining has a great deposit. They have won in court so far to build the mine. Gold prices are 50% higher now than when it was deemed a profitable operation to build. It is backed and controlled by one of the most successful mining billionaires in the world. The stock is unknown and valued at just $23 million when this was written at .13 per share.
They say "Open pit mine (LOM: 12 Years) with annual production of 237,000 oz gold in the first 10 years of mine life at an average grade of 1.73 g/t gold." 45% of that is 106,000 oz a year for Orea. There is far more gold there than just the reserves, millions more oz of resources.
The mine does need to be funded, but with an mega billionaire controlling it, that should not be a problem, but the terms are an unknown at this point.
The behavior of the billionaire and the deposit would rationally point to Orea stock doing a 10 bagger from here. At a 10 bagger it would still be just $230 million market cap for a 106,000 oz producer. But Norgold has a history of buying out partners before production starts. They have amazingly said in court documents that Orea's share of the mine is worth $3.76 billion. Stay tuned.