Rec''d the Canaccord report - shockingly poorWow. I was astounded at what I found when I read Zerb's so called analysis of GMI. It is shockingly incompetent. No wonder it's only a $2.75 target price.
First off, he values the Ni resource at $0.75 lb of Ni in the ground. But he discounts it by 2/3 to $0.27 lb for Ni that might be found more than 12km from the CdM. That's ridiculous when one considers that Falcondo currently trucks ore 42km away. The additional cost to truck ore once it's loaded in a truck is minuscule. There shouldn't be any discount, let alone 2/3rd discount.
And then he was basing valuation on an obsolete NAV calc using $1.50 Cu. I would have thought at the very least a NAV calc would be run using forward curve prices. Why I am so irritated is that NAV at 10% and $1.50 Cu only gives $101MM NPV for a 10 year mine. In CdM's first year, they will throw off ~$90MM alone due to FAR higher prices than what the FS assumed.
And then there is no value given to the nearby high grade Cu deposits that will be used to extend mine life.
Add up all three problems, and his $2.75 target price is RIDICULOUSLY LOW.