RE:Extremely oversold and about to announce copper mine fundingnickbillfish wrote:
Again end of quarter we should have US$20M in cash with repayment of loan from the royalty company. Here are estimated net assets values. Our market cap is around US$26M at $1.04 Canadian per share. A year ago we were at $3.20 Canadian.
Granted Corsa and Inplay down over 50%. Again $20M of our $26M market cap is cash! Basically market is saying the rest is free! Sprott should be announcing financing for MTV mine expansion any day, they filed the technical report about two weeks ago. Look at their web page.
1. Cash - US$20M.
2. MTV mine has a NPV of US$129M over 6 year life and after tax should be generating as much as US$34M in cash after taxes in 2020.
3. Corsa Coal - US$9M
4. Inplay Oil - $4.4M
5. Beretta - $7M
6. Lac Otenuk - $5M
7. Virginia Energy $1.8M.
Total assets around US$176M/35 M outstanding shares or US5.00/share. Current stock price low US$0.70’s which is mostly cash. Again depending on development of MTV mine and copper staying around $2.70 per pound.
Nick - I agree that the upside is significant. One comment on your valuation estimate - I believe that the NPV of the MTV PEA case of $129M USD relates to the total project rather than net to SRHI. I believe we are 70% of $129M USD so roughly $91M USD net to SRHI. We all know that copper demand is increasing each year. Tie in the increasing demand from electric vehicle manufacturing and my thoughts are that we see a couple of years throughout the MTV mine life at a copper price in excess of $4 USD per pound which could triple the projected profit of the mine production.
Note that I haven’t come across any information on copper hedging which could have an effect on realized copper prices as opposed to higher spot pricing. Has anyone heard commentary from management regarding hedging?