National Grid ADR repsg 5 Ord Shs V.NGG

Primary Symbol: NGG Alternate Symbol(s): NGGTF

Utilities Utilities - Diversified

National Grid plc is an energy company. The Company's businesses supply gas and electricity to various customers and communities. Its segments include UK Electricity Transmission, UK Electricity Distribution, UK Electricity System Operator, New England, New York and National Grid Ventures. UK Electricity Transmission segment includes the high-voltage electricity transmission networks in England and Wales. UK Electricity Distribution segment includes the electricity distribution networks of Western Power Distribution in East Midlands, West Midlands, and Southwest of England and South Wales. UK Electricity System Operator segment is the Great Britain system operator. The New England segment is engaged in gas distribution networks, electricity distribution networks, and high-voltage electricity transmission networks in New England. New York segment is engaged in gas distribution networks, electricity distribution networks, and high-voltage electricity transmission networks in New York.

NYSE:NGG - Post by User

National Grid ADR repsg 5 Ord Shs

Bullboard Posts

Post by beaverfeveron May 03, 2009 1:17pm

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Post# 15962912

BUY target .59 - Fundamental Research

Not sure if everyone has had a chance to review this report (?) although they dropped their target, they seem to believe that NGG can be cash flow positive through 2009 (?)

https://www.researchfrc.com/research/pdf/NGG/NGG%20Update%20-%20March%202009%20FINAL%20REPORT.pdf

Here are some tidbits:

Based on our discussion with management, the company has

budgeted to spend about $1 –1.5 million on the second crusher, and about $3 –4 million on
exploration on its properties. In 2009, based on a capital expenditure estimate of $5 million,

we believe the company will be cash flow positive and need not need to raise further capital

during the year.

Our revised valuation of the company is $0.59 per share compared to $0.75 per share in

our previous report.

Valuation Summary

Sinivit 0.22

Imwauna + Weioko 0.30

Mt. Penck 0.05

Interest in COY 0.01

Working Capital 0.02

Debt (0.01)

Fair Value 0.59

- In this report, we have valued the company’s Imwauna and Weioko properties together as we think the two properties are likely to be developed as a single operation.

- Increased long term operating costs from US$200/oz to US$250/oz

- Reduced gold recovery from 88% to 80%. Although we believe the company has not

achieved a recovery of 80% in Q3 2008, based on our discussion with management, the

company is targeting 80% as an average recovery rate, which we believe is reasonable for

the Sinivit mine.

Based on our review of the company’s progresssince our previous report and our
revised valuation models, we reiterate our BUY rating on the company but lower our

fair value estimate to $0.59 per share.

Gold Price (US$/oz) Fari Value

500 0.43

600 0.59

700 0.74

800 0.89

900 1.04

1000 1.19

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I like their numbers, relating to the valuation of share price compared to price of gold.

WHAT I DO NOT LIKE is their inability to state the issue of the multi-million NGG shares held by the bankrupt MacMin Silver, and the impact to NGG share valuation should these shares be sold at market.

IMHO once the MacMin Silver issue is cleared AND Sinivt production is normalised, we should have no probelms reaching .59.
Anyone care to comment ?