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Rupert Resources Ltd T.RUP

Alternate Symbol(s):  RUPRF

Rupert Resources Ltd. is a Canada-based gold exploration and development company. The Company’s principal focus is Ikkari, which is a gold discovery in Northern Finland. Ikkari is part of the Company’s Rupert Lapland Project, which also includes the Pahtavaara gold mine, mill, and exploration permits (Pahtavaara). The Rupert Lapland Project is located within the Central Lapland Greenstone Belt (CLGB), part of the Fennoscandian shield, which hosts 1700 known incidences of mineralization in Finland, Sweden, Norway and Russia, including around 80 mines. The Company also holds a 20% carried participating interest in the Gold Centre property located adjacent to the Red Lake mine in Ontario. The Gold Centre property lies to the southeast and within the shadow of the headframe of Evolution Mining’s Red Lake Mine (which has produced 23.8 M ounces of gold at an average grade of greater than 1/2-ounce gold per ton (or greater than 15.6 g/t).


TSX:RUP - Post by User

Post by templetooth2on Aug 18, 2022 1:30pm
235 Views
Post# 34905230

$21 per resource ounce? What?

$21 per resource ounce? What?
Presentation says the company's resources are valued at $21 per ounce on "issued shareholder's capital". See slide 4 of June 2022 presentation. I haven't bothered to check on "issued shareholder's capital" but it sounds like book value.

The usual metric when valuing undeveloped ounces in the ground is to look at enterprise value, make an adjustment for cash if you feel generous, then divide by resource ounces. I believe Rupert has 191.3 million shares and zero or negligible debt. Cash is a very respectable ballpark $40 million but I don't adjust for it because I would expect that to be spent on further exploration, studies, and SG&A.

At $4.15 per share, Rupert has a market cap of $794 million, ignoring the 7 million stock options.
With a resource of 4 million ounces, my arithmetic tells me that's $198.5 (Cdn) per ounce in the ground.

Skeena has a similar resource of 4 million ounces, and potential for more. It has 69.8 million shares out, not counting 5 million optionable shares. At $6.80 per share, it has a market cap of $476 million or $119 (Cdn) per ounce in the ground. Rupert has a grade of 2.5 g/t or about 5/8ths of Skeena's 4 g/t.

I don't begrudge Rupert's success, but its valuation seems a little or a lot too steep.
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