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Generation Mining Ltd T.GENM

Alternate Symbol(s):  GENMF

Generation Mining Limited is a Canada-based exploration and development stage company. The Company's focus is on the development of the Marathon Project, a large undeveloped palladium-copper deposit in Northwestern Ontario. The Marathon Project is 100% owned by Generation PGM Inc. (Generation PGM), a wholly owned subsidiary of the Company. The Company also has a number of other exploration properties located in Canada. The Marathon Project is located along the Trans-Canada Highway in Northwestern Ontario and covers a land package of approximately 22,000 hectares. The Marathon Project is estimated to produce about 2,122,000 ounces of palladium, 517 million pounds (lbs) of copper, 485,000 ounces of platinum, 158,000 ounces of gold, and 3,156,000 ounces of silver.


TSX:GENM - Post by User

Post by seriousinveston Dec 22, 2021 7:07pm
212 Views
Post# 34256481

I am trying to analyze the WPM deal

I am trying to analyze the WPM dealI am assuming that the price of Au is $1800 and PT is $970.  As I undertand it WPM gets 100% of the first 150,000 oz of Au which is esstentially all that is currently estimated. They pay 18% of the market price for these ounces which would be $325 giving them a profit of $1475 which would total $221M. They also get 22% of the PT produces up to 120,000 oz (the current estimate is GENM will produce 537,000 oz so they get 22% of the entire production).  WPM will pay $175 for these ounces netting them a profit of $95M. So WPM gets a total return of $316M. They will pay GEMN $240M (C) or around $180M USD. If you assue that WPM receives its 316M in equal annual payments over the 13 year mine life(approximately $25M per annum). The the return on its investment of $180M(USD) is less than 10%.  I have no idea what rate of return WPM seeks when it enters a stearming deal but I think one with a junior miner that has not yet commenced production or even obtained all the necessary approvals  would not be desirable if the ROI was less than 10%.

WPM is a very sophisticated company and one of the largest streamers that exist.  They know what they are doing.  WPM makes a lot more if the
amount of Au and Pt exceed the current estimates or if the price of those metals increases over the 13 years currently estimated both of which I think are likely.

Frankly I am guessing tehy would not have done this deal unless they were convinced that one or both of those will happen.

I am shocked that we ended the day at $.82. I think this is looking like a very attractive investment and a far bettter deal when I first investeed earlier this year.  If I can find some extra cash I will add to what for me is a prettty large position already.

I would appreciate anyone challenging my calculations.
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