AUREUS MINING INC T.AUE

RE:RE:RE:New management team! + $30m cash

[grammadux]

I repost my quick caluclation from the LSE board, company will get a complete revaluation once production restarts and the MNG deal is sealed IMO


"Downside risk almost completely eliminated due to MNG as majority shareholder with deep pockets, bankruptcy is off the table
Complete managment change, we all agree that the current situation was largely due to serious managment mistmakes 

Negative is the timing of the placement, as for most exsiting shareholders the price is very low
Question is at hand, why they did not wait till production restart and do this deal at 5p instead?

Nevertheless tried to calulate enterprise value before MNG placing:

debt was around $105m borrowing plus $28m payables according to RNS
cash was $3m
equity was 540m shares valued around $0.04 per share equals around $22m
So 105+28+22-3 is $152m enterprise value

NOW debt will be $105m assuming the use the placement proceeds to pay off creditors
cash will be around $5m (taking the 2m left from the 30m proceeds)
And new equity will 1200m shares, question here is what should the intrinsic value be?? So if you have a look at other producers in Africa at the size auf AUE minimum value should around $300m (basically double the old EV) EV, for reference look at Terranga gold presentation which compares EV for Miners in Africa

https://image.slidesharecdn.com/06-07-16-teranga-gold-agm-presentation-final2-160607123720/95/06-0716terangagoldagmpresentationfinal2-21-1024.jpg?cb=1465303052

Taking the $300m as EV minus $105m debt plus $5m, this implies an equity value of $200m, diveded by outstanding shares this would equal 0.165USD per share or 12p

With secured funding and production restart, this sould be the target over the next year IMO