RE:RE:RE:AGG NPV Estimate - LOM 8 Years Gold price $1,400Lots of interesting posts over the last couple of days from SixBottle and also Spence. I also think SixBottle has been conservative but better conservative then making unsupportable predictions. FWIW following are my thoughts on some of the variables used in the analysis.
1. Based on 100K oz production I believe the entire project will come in around $70MM - 80MM CAPEX. The 2016 FS was $45MM of which $35MM was for the plant based on 50K oz production so would have been approx $70MM CAPEX to double. That was based on Gekko plant from Aus. I think there were reputable lower cost manufacturers available out of South Africa but I think previous management was hoping for export financing from Aus government similar to EDC in Canada.
2. I don't see how they would be able to debt finance the entire CAPEX but who knows.
3. Where did that 6% royalty come from in SixBottle's calcs? I didn't see anything in the 2016 FS relating to that.
4. My guess is the AISC is going to come in under $800 oz, maybe even closer to $750 oz. Fingers crossed! Even at $850 though this will be a great project.
5. Don't want to be a Debbie Downer but you always have to apply a Mali discount to any valuation due to geopolitical risk and that discount will be significant.
Anyway you look at it though we should be trading a lot higher then where we are based on the 2016 FS, never mind the pending DFS. As Spence pointed out at $1400 POG AGG NPV was $126MM USD. At $1600 POG it should be $150MM+ USD or $210MM+ CAD. Even with a 50% Mali discount that would value AGG at $100MM+ CAD and the current market cap is < $30MM. Now assuming Kobada NPV doubles with the new DFS you could put a condservative valuation on AGG of $200MM+ CAD which should put the SP well north of a $1. Just wish the market would agree with my assessment.
AGG has been been trading with a fair amount of volume in a fairly tight range for the last 3 - 4 weeks so hopefully the table is set for the next move up to high 30's and low 40's prior to the release of updated resource calc and DFS.
GLTA and stay safe!