Post by
ukermann on Sep 12, 2020 7:36am
Undervalued By Current Market Standards
Watching the Chinese-Nordgold fight for Cardinal, they've upped the ante to about $48 per oz for the gold in the ground. Using that as the regional basis, computing out the 3.1 million oz's we have, should give us a valued market cap of approx $150 million, with no credit for any additional ounces to still be discovered. Yet, we know, we've barely scratched the surface of what still needs to be explored. Bottom line, at the $150 million, we should be marked at $.55 a share, US$. Here's a paragraph from Taylor Dart on Seeking Alpha:
If we look at the table above, we can see that Namdini is currently home to ~7.0 million ounces at an average grade of 1.13 grams per tonne gold, and SD Gold's most recent offer works out to A$494 million [US$356 million] based on the company's 494 million shares outstanding. After subtracting out US$17 million in cash, this translates to an offer of US$339 million. Some investors might be getting excited about the bidding war and under the impression that gold juniors will start getting top dollar in takeovers. Still, it's essential to look at what's been paid previously and the current offer on a price paid per ounce basis. Given the offer of US$339 million and the 7-million-ounce resource, this works out to just US$48.43/oz. While this is a massive improvement from the initial offer of US$30.57/oz for Cardinal, it's well below the price paid we've seen recently, despite a record gold price.