OTCPK:VLSTF - Post by User
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thisisriskystufon Sep 07, 2021 6:16pm
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July 20, 2021: The Upside Implications of Nelligan for VSR
July 20, 2021: The Upside Implications of Nelligan for VSR Kaiser research
Vanstar Mining Resources Inc is assigned a Fair Spec Value
Rating at $0.65 and made a 2021 Favorite effective July 20, 2021
based on its 20% net interest in the 3.2 million ounce Nelligan gold
project in which IAMGOLD is vested for 75% and can earn 80% by
delivering a feasibility study. Vanstar is primarily an asset play
based on the future value of its Nelligan stake which under current
outcome visualization assumptions is in the $3.50-$4.50 per share
range depending on the discount rate used for the DCF model
based valuation. This target will take several years to achieve if
IMG embraces a timeline that delivers a feasibility study by 2025. The project has potential to deliver at least a 50% resource expansion, whose plausibility should be evident by the end of 2021, and this would boost the target range to $5.40-$6.90. During this period the price of Vanstar will also track gold price trends, which, if driven higher by factors other than inflation which do not increase capital and operating costs, would, at $3,000 gold for example, boost the current OV target outcome range 158% to $9.03-$11.61. The downside risk is that the destiny of Nelligan is completely under the control of IMG, which for reasons unrelated to Vanstar may not aggressively advance Nelligan. That is why Vanstar is secondarily a play on the new management's capacity to leverage the fundamental value of the 20% Nelligan stake into an asset acquisition-development strategy that is accretive to Vanstar and completely under management's control. Such a strategy needs to be deployed by CEO JC St-Amour during H2 of 2021 before IMG completes a minimum 9,200 m drilling program at Nelligan that began in July 2021.