Oroco Resource Corp V.OCO

NPV discussion

[GeneralGogol]

I have been following with interest this discussion board’s prognostication threads on NPV, and like many of you, I too have been wondering what this asset will be valued at when translated into a buyout price. ** Spoiler alert – I don’t know! **

The big mining players are in the business of selling concentrate, ingots, and other metal products at profitable margins.  Building a mill and adding all that infrastructure so that ore can be extracted and made into commercial product profitably takes a fair amount of up-front investment.  If they over-pay for an asset, that can cut into their profit margins.  So how do they know the value of such an asset prior to making an offer?  Many variables are at play.  Here is a good explanation on some of the metrics that can be used for mining asset valuations.  I have no relationship with these folks and am not trying to market their services.  I simply found their explanations helpful.

https://corporatefinanceinstitute.com/resources/knowledge/valuation/mining-asset-valuation-techniques/

An ideal resource scenario for a mine is to have a significant high-grade ore that is easily exploitable (e.g. close to the surface).  A potential acquirer could conclude that early in the mine’s life-cycle, the revenue stream from a high-grade would be above average.  So they might very well be willing to pay up for that advantage.

Or one or more potential acquirers may look at their current portfolio and see declining output in the near term (as lamented in some annual reports).  Their business planning group might conclude that they really need to add something with an output of “x” tons per year in three to five years’ time.  Having a quality asset on the pacific coast and close to transportation networks may be too good of an opportunity to pass.  With the recent copper price trajectory and global demand projections not slowing down, paying extra for an asset may not carry much risk. This could add an extra pricing bump over traditional mining asset valuations. Time will tell.

[caliche]

keep in mind also that Santo Tomas is a generational asset..it will be producing copper 50+ years from now.. what will the price of copper be in 20 or 30 or 50 years?  higher for sure!  but any purchase price and capex will be long paid off  Brasiles could be a stand alone high grade copper gold silver deposit... the rest will be gravy for decades! im not saying it doesnt matter

[AnchorValue]

shall we start taking friendly wagers on where the stock price will be at EOY?

[TiffanyDonato15]

Not concerned with EOY, although fun idea, but my money is on a $10.00 USD BO in late 2021! (IMHO)

[auricgold]

AY Caramba!!! 10 USD?????? Shoot even if thats in late 2022 I would not mind at all!!!

[auricgold]

Anchor, I think i will go back to my original target, well real original was 1$ then I said $1.60 CAD. Ill stick to C$1.60 tear end and then end of 2021 I am looking at C$3.50.

[caliche]

i was going to ask what year then thought this might be oco's last christmas! 10usd fine with me! merry christmas all. its been a great year and we are just warming up! .

[GeneralGogol]

What did Bingham canyon sell for in 1848? Oh, I’m sure that the U.S. Treasury was fairly compensated for those claims... ;-) You raise a good point. Way back in 1848, prospectors had nothing remotely close to the various analytical tools that are in use at San Tomas. The ability to conduct 3D-IP on top of known historical drilling data from previous expeditions is a tremendous gift – and this