RE: What''''s to say?I totally agree with you on the likely target price and why I've been pounding the table on TAM for a year now.
TAM is 100% confident of beginning production in '09. And everyone should be too. The FS was a home run. Nobody on the planet would fail to fund this mine with 100%+ IRR. But for attrocious promotion and a totally convoluted story, this play should carry a $100+MM mc right now. The permits are in the bag - just have to wait for the friggin bureaucrats to get off their azz and issue the recommendation - there are no environmental concerns - the FN are all in support as are the local communities as this mine will once again be a major long term employer with good wages for blue collar workers in an area desperate for jobs.
If you think I'm blowing smoke, go compare to the likes of AIM Resources, Herald Resources, Tri-Origin etc etc. All are pre production juniors bringing on zinc projects. Only Herald will be a bigger producer and have better grades and profitability - but not by much. Yet Herald, even with being unable to get the last permit for 18 months, has nearly a $150MM mc and won't be in production any sooner than TAM. And Herald has risen 50% in value over the last month as Perayla is expected to buy them out once the permit is announced. Or compare to SRZ's Tenn mines. Or Acadian's Scotia mine. Or Blue Note. All are significantly smaller producers throwing off far less cash flow, yet trade at 5-7 higher multiples. In terms of production and cash flow, TAM won't be all that far behind Breakwater, with it's $1B market cap.
I follow every pre production zinc play on the London, Aussie and Canadian markets (accounting for the vast majority of new producers - about a dozen plays). In comparison, TAM is so egregiously mispriced it's scary. The market simply doesn't get it or know about them due to almost non existent promotion. Permits and financing are just around the corner. No other pre production junior can compare when it comes to resource size and existing infrastructure. The only "comparable" deposit (in grade and tonnage) is the 49% Lundin owned Ozernoye deposit in Russia. Last year, for their 49%, Lundin paid $125MM and committed to spend at least $200MM for their share of capex (which is likely to increase substantially by 2012). Ozernoye is a 300,000 tpa mine (~150,000 net to Lundin) that won't be in production until 2012. So, for slightly more production than TAM (average of ~100,000 tpa zinc and ~40,000 tpa lead), they paid $125MM for a deposit literally in the middle of nowhere - no infrastructure, zip. Yet TAM can't even get a $30MM mc being in production three years earlier with far better profitability???? It's friggin insane.