LYD valuation: now at 0.36x P/NAVAfter all the financings, it's time to figure out what's it all worth.
- I pulled the after-tax NPV 5% sensitivities from the Nov 25, 2015 Ni 43-101 report (table 1.12 p. 61).
- Calculated proceeds from financings
- Calculated new fully diluted shares out including full exercise of out-the-money warrants/options
- Estimated adjusted stream liability for gold price using $ 400 purchase price
Which gives the following table:
| Gold / oz | $950 | $1,050 | $1,150 | $1,250 | $1,350 | $1,450 | $1,550 |
| IRR (AT) | | 17.3% | 21.6% | 25.7% | | | |
| NPV 5% (AT) (M$) | 138 | 238 | 338 | 438 | 538 | 638 | 738 |
| Cash (M$) | 361 | 361 | 361 | 361 | 361 | 361 | 361 |
| Minus debt (M$) | -160 | -160 | -160 | -160 | -160 | -160 | -160 |
| Minus stream (M$) | -44 | -52 | -60 | -68 | -76 | -84 | -92 |
| Equity value (M$) | 295 | 387 | 479 | 571 | 663 | 755 | 847 |
| Value/share (CAD) | C$0.49 | C$0.64 | C$0.79 | C$0.94 | C$1.10 | C$1.25 | C$1.40 |
| P/NAV @ C$ 0.34 | 0.70 | 0.53 | 0.43 | 0.36 | 0.31 | 0.27 | 0.24 |
We're now basically trading at 0.36x P/NAV, while Amulsar is:
- fully permitted,
- fully financed,
- and construction just commenced.
Given that producers trade around or sometimes above 1x NAV, I think 0.36x NAV now is a total steal. Even adding in a Armenia-discount, it's hard to argue it's worth less than 0.5x NAV, or some C$ 0.50 per share.
A major could add value in a jiffy if they purchase LYD's Amulsar off the shelve. The project being able to receive financing at the market trough speaks volumes for its quality. Even at $ 1050 gold the IRR is 17.3%.
I expect LYD to join the rally of its peers and catch up big time.. it will start throwing off cash in a few years, so the stock will not be flying under the radar for long. Only question is: when? I am curious to see what happens...
Any remarks appreciated, thanks.
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Calculation of cash
| Cash @ March 31 | 25.0 |
| Cash from options | 1.8 |
| Term loan | 160.0 |
| Stream (2nd deposit) | 35.0 |
| Equity Orion/RCF | 80.0 |
| Warrants Orion/RCF | 1.5 |
| Equity issue public | 29.5 |
| Warrants exercise | 27.9 |
| | |
| Total ($M) | 360.7 |
Calculation of shares out | March 31, 2016 | 184.6 |
| Options <C$ 1 | 3.7 |
| Public equity issue | 132.3 |
| Warrant issue | 99.2 |
| Equity Orion/RCF | 349.1 |
| Warrants Orion/RCF | 5.0 |
| | |
| Total diluted shares | 773.8 |