US $22.5 Billion metal for C$77 Million
Have been a FRA investor for several years – even before they listed on the TSX.
According to “back-of-the-envelope" calculations, the in-situ value of Franconia’s metal in the ground, at todays metal prices is at least US$ 22.5 Billion. Duluth are about to acquire this for C$77 million.
Franconias March 2009 presentation gave Targeted Annual Metal Production, NPV, MKT Cap figures for PLM vs DM vs FRA (US$). https://www.franconiaminerals.com/i/pdf/Presentation-Mar2009.pdf
As below, have taken the metals at todays prices, multiplied by FRAs figures for annual production target, multiplied by mine life, with uplift for 2010 increased resource estimate.
https://www.franconiaminerals.com/s/NewsReleases.asp?ReportID=433340&_Type=News-Releases&_Title=Franconia-Files-Technical-Report-Supporting-New-NI-43-101-Resource-Estimate...
Nickel 11.21/lb X 19,000,000 pa X 26 years X 130% = US$ 7,199 Million
Copper 4.22/lb X 74,000,000 pa X 26 years X 127% = US$ 10,311 Million
Cobalt 17/lb X 2,900,000 pa X 26 years X 100% = US$ 1,282 Million
Platinum 1,711/oz X 33,000 pa X 26 years X 122% = US$ 1,791 Million
Palladium 746/oz X 68,000 pa X 26 years X 1225 = US$ 1,609 Million
Gold oz 1386/oz X 7,400 pa X 26 years x 124% = US$ 331 Million
US$ 22.5 Billion
Whilst investors who got in at year low of 0.235 cents may be happy. I am not since FRA was heading north and $1 was in reach. And when Polymet gets its permit we could have seen $2 and then headed back up to all time highs of around 4 bucks – ah wishful thinking.
Now we must congratulate DMs management on a fantastic deal for their shareholders and just wonder why FRAs management have been incapable of maximising share holder value.
Or just maybe we will see a rival suitor?