Barrick Offer
The Barrick Offer for Equinox gives a great benchmark for copper production valuation.
The focus is on the shorter-term production and pay-back.
Lumwana - 350 million lbs cu./year or 3.5 billion lbs for the next 10 year total, Barrick ponies up about $2 lb.
Hugo North - can contribute about 50% (we hope) of IVN's predicted output over 10 years of 1.2 billion lbs/year, or 12 billion lbs ten year total. But IVN has modeled grades of 1.3% and I suspect/believe that HNE can contribute the better part of 10 years with cu. eq. grades closing in on 3% if the deposit is extended and the high-grade tonnage now standing at 64 million tonnes grows towards 120 million (to the 1300m N mark) - which will bump OT's first 10 years of output closer to 20 billion lbs cu eq. - with, in my scenario, half coming from the JV, but representing more like 2/3 of the metals due to the higher grades.
So ask yourself, if 3.5 billion lbs over ten years in Zambia is worth in the range of $2/lb and $7 billion cash from Barrick today, what would Entree's 2.5 billion lb share of HNE mill feed for the same period be worth? Up to $5 billion? That is an astounding $40/share from HNE alone.
So discount it all you want.
Don't you think Barrick came tire-kicking at OT if they had $7 billion to spend on copper? And isn't the OTLLC raising another $4 billion for development?
This stock is so wildly undervalued it truly amazes me.
I bought a bit more today, and down she goes! LOL I don't care.
CG