Friendly VTR analysis
Asked a friend, who had a quick look at Volta Resources and generally liked what he saw:
The Technical Report economics was encouraging, although the price ($1,372) seems on the high-side. On the other hand, the NPV was at 8%, normally 5% is used. Taking a wild guess at income tax, a peer comparable P/NAV ratio could be about 0.25, which looks pretty good to me. Similarly, the EV/oz (which is generally a pretty useless measure) seems to be at about $22 – also on the low side. Cash operating costs are on the high side – project sensitive to gold price.
Seems to have a quick feasibility/permitting/construction timeline – probably optimistic. Never heard of the TR engineers – any good? You probably could get your hands on some analyst reports that covers all – they like the stock.
· The exploration upside looks very good
· Their financing approach seems sound
· The board/management looks reasonable. Insider trading on the positive side.
· Cash balance looks good but the burn-rate is high
· Recent trading looks good – two or three big sellers – may disappear soon?
· But, not that keen on Africa ...
· Not that keen on the gold price direction, but there are plenty of guns, god, and gold bugs out there ...
· How is VTR priced compared to its peers ...?