Royal Nickel Corp. RNKLF

RE:Overvalued?

[NikhilG92]

Ok. So on the exposed wall where the 'golden rose' or drill hole exists there's approx. 10-40 M of gold.

 To Geodan's point on the 'golden rose', implied valuation could be somewhere around $10-40 M depending on how much gold is extracted (assumed 40%) and how deep the vein runs (could be 12", assumed 8"). Below is the rough math: 8"x20"x14" = 2240 inches^3 * 40% assumed gold = 896 inches^3 x 10.16 = 9103 ounces of gold x $1900 CAD per oz = $17.2 M of revenue

On valuation

Shelby: "Obviously with 30,000 ounces that will be hitting the bank account over the next few weeks we’ll have more than enough capital to do the drilling we need to build what we think will be a very, very big gold mine that will last many years in the Kambalda region." So they made $30 M in one month. Let's drop that to $20 M per month and say its a 50% net margin which is probably conservative (I remember reading 1900 revenue per ounce vs. $4-500 cost per ounce) so $10 M per month free cash flow. $120 M at a 10x multiple = $1.2 B valuation = $2.70 fully dilluted.

To put this into context. Total of say $60 M of gold has basically been discovered the size of a living room. The vein runs for 500 M +. Of 8 KM of potential gold bearing fluids. Extrapolate and be conervative and you still get massive upside.