RE:RE:New to NCU >>> here are my thoughts >>> DYODD >>>Good morning Beezer441. Glad to here from you.
Anything is possible in love and war including $3.30 copper. I tend to subscribe to the more bullish calls on coppper, as tied to the price required to justify new supply combined with the demand growth from new energy and EVs etc, but let's try and game that out.
Underground 60 to 77 million pounds so lets use the 65 million again. Long term all in cost is closer to $1.77 (if I remember) but lets use the first 5 year number of $1.86 cost so:
Underground free cash flow 65 million X $1.44 = $93 million
Open pit (if they still wnt directly to 70 mtd = 220 million pounds when it is done at copper equivilent and the all in cost is $2.03 (memory again) so:
Open pit: 220 million X $1.23 = $270 million
Underground plus pit = $363 million annual free cash flow X 5 multiple = $1.8 billion
$1.8 billion plus $100 million form warrants = $1.9 billion divided by fully dilllured shares of 2.3 billion = $0.83 USD per share
= $1.00 CAD per share for a decent 300% return from today's share price. Cheers,
Notgnu
Beezer441 wrote: Hello Notgnu
Im new to the site and a new poster to this page although I have to admit I've been following (enjoying) the banter from the sidelines for some months, since Feb 2021, when I first purchased NCU.
I appreciate the detail and straight forward methodology in your analysis.
One thing that has me wondering is company evaluation given the long term outlook for copper (expected to be good or possibly great if one believes all the hype). A recent National Bank bulletin has a more muted long term outlook for copper at $3.30/lb. At that price the underground mine+ open pit would be more like .80-.90 at 5 x cash flow.
Any comments? Too conservative outlook long term for copper price?
Thanks
Beezer
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