Stiffel reporthttps://stifel2.bluematrix.com/sellside/EmailDocViewer?encrypt=77a13307-b4bc-4e6c-bb6a-cfeef1728d5e&mime=pdf&co=Stifel&id=StifelCanada-All@stifel.com&source=mail
Target Price Methodology/Risks Applying a 0.75x multiple to reflect the pre resource, predevelopment risk of both Kay and Sugarloaf to our corporate NAV, we arrive at a target price of C$7.50/sh. RISKS Market risk/gold price – Profitability and cash flow will be directly impacted by changes in gold prices. A material decline in gold/metal prices would adversely affect profitability, cash flow and may also render certain projects uneconomical.
Price and cost instability – In addition to gold/metal prices, foreign currency rates and the costs of various input materials associated with mining can fluctuate substantially, resulting in a negative impact on the company’s profitability. Technical risk and economic viability – Mining operations/projects can be exposed to various operational risks that could impact cash flow and a company’s ability to secure future liquidity. Geopolitical risk – Mining operations/projects in higher geopolitical risk countries can be exposed to changes in government policies, such as permitting policies, licenses and tax laws, which can negatively impact the mining companies. Exploration – Exploration success cannot guarantee an increase in a mine’s/project’s resource base or conversion to mineral reserves.