Stonecap's thinking on Premier Gold - Take overTaken from StoneCap's initiating research piece on Premier Gold, which is focused on developing properties in Ontario, so not a 1-1 comparison with SBB, but their size of deposit, up side potential, and high grade M+I resources align closely with what SBB has in Nunavut. Figured it was worth sharing as StoneCap is banking on Premier being taken over due to their resource attractiveness to Majors.
Also for anyone else looking for a really similar company to Sabina, also operating in Nunavut, should take a look at North Country Gold. Another greenstone belt asset, with high grade drill results who are releasing an updated gold resource in Q1 2012. Trading @
.75/share.
Corporate Transactions multiple
Companies that are perceived as acquisition targets tend to receive a premium valuation in the market to reflect takeover potential. As such, Premier's Red Lake assets have the potential to be valued similarly to Gold Eagle's Bruce Channel Project (acquired by Goldcorp in 2008) and Virginia Gold Mines' Eleonore Project (acquired by GG in 2006). These are high-grade projects with large-scale potential and significant exploration upside that were acquired at relatively early stages of development.
Both Bruce Channel and Eleonore were acquired prior to an initial resource estimate being completed on the projects. When the Bruce Channel Project was acquired, an acquisition cost of ~US$300 per ounce, based on a 5 million oz gold resource, was estimated.
At the time it was acquired, the Eleonore Project's potential resource estimates generally ran from 2-3 million oz Au, which implied an acquisition price of US$140-210 per oz Au during a time when the gold price was much lower, averaging ~US$600/oz in 2006.