Bottom line...What is TLG worth?This is the only question you need to ask and answer. We can compare it to peers such as ARTG, we can cite other large low grade projects, but in the end every mine is unique and every project has a value.
Value is a function of many things. Obviously the POG is critical. Cost is critical. Profit is critical, Cash flow is critical. Add it all up and you have value, worth.
At $2000 gold and what we can infer about future production, TLG should have a NPV of at least $2 Billion.
With a current market cap of $150 million it is valued at less than .08 of NPV....It is valued at one half the cost of the tailings facility alone. It's valued at a fraction of the value of the camp, powerline, substation, water treatment plant and existing site work.
On that basis alone all the gold and copper is less than FREE
On a market cap to price of gold in the ground the gold is valued at $10 per ounce....there are takeovers at $100 per ounce of gold in the ground
If the share count were doubled in the financing it would still be valued at .2 or less of NPV
With double the share count and finaincing in place it should be worth at least .25 x NPV or $500 million...minimum
That's close to a fully diluted share price of .85 cents or 50% higher than the current price. This is with nothing being done other than getting financing and 100% dilution
Assuming less than worse case scenario where debt and a stream is relied upon and share count goes to 500 million we're at $1 per share at .2 x NAV
If the NAV is closer to $3 billion 1x NAV is $6....,2 of that is $1.25 or so.
As the project gets built that .2 is going to trend towards 1x NAV as all mines do. At .5x NAV you have a $3 stock
I hope you get my point....you can argue what the capex will be or what could go wrong but fundamentally even if you paint a worst case scenario TLG at .56 cents or 150 million market cap is ridiculously UNDERVALUED.
Gold in the ground is undervalued by as much as 10x ....price to NAV is currently undervalued by half at least
The intangibles are worth something too.....it's a prime takeover target for a major
Warren Buffet has said...."price is what you pay, value is what you get" At this price you are getting value at 90% off using price to NAV or price of gold in the ground
Mines are value creators or at least provide a mechanism by which value is created over time. This isn't some greenfield site, it isn't full of unknowns, it's big, it's brownfield, it's desireable, it's worth is being unlocked from insanely cheap levels
Will it ever be a $6 stock? I doubt it unless gold goes to $2500 $3000 which could happen. Will it be a $3 stock? IMHO absolutely.
The Feasibility study and the trade off studies will be out in a few weeks. Not going to be this month I've been told. It will reveal all so the guessing can be put to bed.
I think TLG is worth $3 per share under the most likely scenario and that value will be realized in 2 to 3 years.....I'll stick around for 3 years for a 6x return.