Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Acadian Mining Corporation ADAIF



GREY:ADAIF - Post by User

Bullboard Posts
Post by Roland22on May 10, 2007 2:17pm
433 Views
Post# 12759766

ADA Valuation

ADA ValuationA good post from the Investor Village RNO board on ADA's valuation and potential. ADA.V - for zinc fans? I’m not sure who recently mentioned this one, but after taking a look…thanks. Might be a nice upcoming zinc-lead play. Since I’m new to the name I would be curious on other thoughts for those that may have been following longer. Profits will come mainly from zinc over the next couple years, and with zinc inventories resuming their LME cliff dive this little company might be a good place to stash a few bucks this year. Don't let the gold name fool ya. ADA looks to me to have an impressive zinc-lead project that just started up production (fully commissioned this summer), but they do also have a few gold projects. From the last PR: “If production targets are met in 2007 as expected, the Scotia Mine should produce approximately 23.4 million pounds of recoverable zinc metal and approximately 7.8 million pounds of recoverable lead metal. Targeted production for 2008 is approximately 44.6 million pounds of recoverable zinc metal and 19.1 million pounds of recoverable lead metal. The cash cost of production is projected to be approximately US$0.52 per pound zinc-equivalent in 2007 and approximately US$0.34 per pound zinc-equivalent in 2008.” Overall after a brief look I really like what I see other than the excessive amounts of warrants out there (which is probably why the stock has been basing for about 4 months while others have been running, fine by me I like the value at these prices and will wait for the market to chew through the overhang). The company has about 120 mil shares out plus 15 mil in in-the-money warrants/options that will be exercised at various points this year. $20-$23 mil or so in cash after the most recent financing so excluding out of the $ warrants from recent financing exercisable at $1.35…fully diluted market cap of about US$135 mil and we’ll say enterprise value of only around US$120 mil roughly. I calculate them doing about US$68 mil of operating cash flow annually once they hit the run rate for next year (this is using $1.60 zinc and $.85 lead). So yet another “expensive” stock trading at two times cash flow. And they should pull in $30 mil or so in cash by the end of 2007. Reserves….just from the scotia mine alone…roughly 330 mil pounds of zinc and 150 mil pounds of lead. Add in 500k – 800k ounces of 43-101 compliant gold reserves. Seems like the zinc / lead project alone is worth double the current stock price, and we have gold reserves nearly worth today’s market cap. Maybe not a TAM type potential “multibagger”, but the cash is about to start rolling in for ADA and seems very cheap compared to other current zinc producers. Best, MC Disclosure: I’m long and may buy or sell at any point. As always, Do Your own Due Diligence.
Bullboard Posts