Compare Canariaco with Josemaria Res.
Consider Josemaria Resources, a company that was recently acquired for USD 490 million compare with Candentes Canariaco:
Norte and Sur (so far)
14 billion p Cu
3.3 million ounces of gold
74.4 million ounces of silver
at 3.5 USD/pCu and 8% discount
NPV $1.01 BILLION
Capex $1.04B
IRR 16.3%
Josemaria Resources
6.7 billion p Cu
7 million ounces of gold
31 million ounces of silver
at 3.5 USD/pCu and 8% discount
NPV $1.53 BILLION
Capex 3 BILLION USD
IRR 15.4%
and assume the following conservative long-term values for the calculation:
Copper $3.5/p
Gold $1,650/oz
Silver $21.5/oz
then we see the following resource value
Norte/Sur (so far)
Copper $49B
Gold $5.445 billion
Silver $1.6 BILLION
Josemaria
Copper $23.4B
Gold $11.6 BILLION
Silver $0.66 BILLION
Norte/Sur total
$56.04 BILLION
Josemaria total
$35.66 BILLION
Now one could say: For the total resource value at Josemaria of $35.66 BILLION
an acquisition price of USD 490 million was paid, so USD 0.0137 per USD resource
value.
Transferred to Norte/Sur, this would correspond to one in comparison
Acquisition price of USD 770 million
And if you say that Norte/Sur have USD 2 billion less capex, then you could
for a total resource value of $56.04 billion compared to the $2 billion more expensive
Adding the Josemaria project would then come to USD 58.04 billion.
In comparison, that would correspond to one
Acquisition price of USD 797 million
so
$2.96/share.
In this consideration we are only talking about Norte with Sur, which is only 25% drilled
(15 boreholes).
So Sur could still contribute another 300% of the now known resource, according to that
USD 30B resource value (6.6B p Cu, 3.6M oz gold, 45M oz silver).
And Verde could be with 50% of Sur (inferred total resource value USD 40 BN)
Estimated to be USD 20 billion total resource value for Verde.
Since it is not secured, you would not pay for these two resource values in full
want, if anything.
However, against the background of the urgently needed young copper projects and
a copper price of USD 15,000 per ton expected in the medium term (some go in
up to USD 20,000 in peak years) and assume that
a potential buyer for the $797 million currently proven resource of
Norte and Sur another 20% of the plus probable resource value of Sur and Verde
($50 billion additional resource value, which would represent an increase in potential
originally calculated purchase price by a further USD 687 million), then we would come
to a theoretically possible purchase price of
USD 934 million
That corresponds to one
Share value of USD 3.47.
Only when looking at Norte's proven resources ($46Bn resource value) and
Sur (Resource value at 25% drilling $10Bn)
an additional USD 30 billion assumed resource value for Sur and an additional USD 20 billion for Verde
and these would be paid 1 to 1 (which cannot be assumed) like this
would add another USD 687 million to the purchase price of USD 797 million derived
above added.
So a theoretical intrinsic value of the entire Canariaco project of
USD 1.475 billion, so then
$5.48/share.
Of course, these are all just personal observations and personal thoughts and opinions
no purchase recommendation.
For me, however, it is precisely this gigantic resource value of Canariaco that makes the
share extremely attractive.
And the perfect storm for copper is already in place:
A significantly falling supply meets a sharply increasing demand.