My last post without the typos and proper grammar. Social this is more info from the report. If and when The Royal Canadian Mounted Police come knocking on my door and extradite me north of the border for distributing this, I hope you all pool your profits from OLE and come get me.
OLE - TSX $1.10
TARGET: $3.25
PROJ. RETURN: 195%
VALUATION: 1.0x NAVPS
I assume that the total he arrived for the NAVPS is $3.25 multiplied by the number of shares. Remember according to the report this is a conservative number if a deal with Teranga happens because of their ready to produce mill.
Here are a couple of more highlights of the report talking about valuation
.
VALUATION – Significant Upside Remains.
We believe the underlying value of OLE is composed of two key ingredients – the
economic value of existing mineralization defined by feasibility assessment, and the
additional value of resources defined which we call exploration potential. We could
state this potential value differently as the sheer potential saving of avoiding the
up-front capital costs of building an entirely new mill, which more than exceeds our
current estimate value for exploration potential. Hence, significant upside remains.
Strategic location has potential to add additional value: A newly expanded
mill easily capable of handling OJVG material is strategically located very proximal to
these resources. While a feasibility study concluded the OJVG partners have robust
economics even if they were to build their own mill ($364 million of up-front capital),
such as use of capital would be a waste given the excellent infrastructure Teranga
have already completed. A recognition of this dynamic is critical to achieving further
value.
Hope this helps Social and thanks for your quick response on my initial 5.5 million ounce Mackie estimate. I knew the analyst was probably just estimating because he never used the words "M&I or NI 403 certified". Like you said, give him some credit for sticking his neck out with his numbers.
Comments?