Royal Nickel Corp. RNKLF

Northern Star 2???

[Goldnboy1]

Our neighbour to the north is Northern Star Resources. They trade on the ASX. Actually shocked they dont have a TSX listing.

The stock is incredibly successful. You could have purchased Northern Star for 0.01 in 2009. Today it is worth $9.00+.Decent capital on their balance sheet. 5 billion dollar market cap. Company has mines in North America and Austrailia. 

I am bringing them up because they own mines in the area and have a very good balance sheet. They have roughly 463 million in liquidity (about 263 mil cash, rest open on line of credit) and about 350 million in annual profits. From 900k ounces of production.

Their market cap is 5.3 billion...

It is my anticipation that we will have approximatly 45,000 ounces of gold from Q3 production. I believe it will take about 10,000 ounces of gold to cover our operating costs from that (which is basically equal to the low grade mining from the upper level of the mine).

Leaves us with 35,000 ounces of profit is equal to 42.875 Million at $1225 gold price.

Now Northern only has about 500,000 ounces of gold Measured. They also have 16 million ounces inidicated. So given the aggressiveness of the coming drill program Beta Hunt could have more measured ounces than Northern Star does and eventually more indicated as they test above ground extensions.

Also it should be noted Beta Hunt only had 1 month of mining on the lower level.

It would be highly encouraging if with quarterly numbers management commented that the mine is continuing to be on track to meet or exceed the previous months production. One could then multiply our high grade ounces by three or to 105,000 ounces (115,000) when low grade is considered. 

105,000 ounces profit is 128 million profit based on $1225. With a quarter achieved and no slow down in sight. We will be able to multipliy our quarterly production by 4 for annualization. The result of that based is 512 million in profit potentially. With possibly as many ounces measured or more than Northern Star. It is likely with that much profit even if we spend 50 million drilling we will have 450 million left in the bank. 

All of this is based on the assumption that the indicated 740m / 145m zone is the eventual size of the living room sized fathers day discovery.


CONCLUSION:

If Northern Star is a 5.3 billion dollar company with 350 million in annual profit....
Then RNX with 512 million profit and similar proven resources and market valuation would be worth 7.65 billion. Which would be $15.70. 


By this time next year who has a higher market cap...Northern Star or Royal Nickel? I say Royal Nickel!!!

Looking forward to news! Hopefully tomorrow before open!