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Sandstorm Metals & Energy Ltd STTYF



GREY:STTYF - Post by User

Post by elmothefearlesson Nov 01, 2012 10:16pm
372 Views
Post# 20553140

If we were SSL...

If we were SSL...

An argument may stand that we should not be garnered with a valuation as high as SSL's, as we are not a precious metal streamer.  A counter argument would exist that, by our nature of being a smaller company, we can grow quicker, and therefore a premium valuation is justified.  SSL is trading at about 18x forward cash flows.

 

$15 M (Donner) + $1 M (TBD) + $1 M (NDX, assuming financing is completed and we earn cash from a combination of royalty / interest) = ~$17 M x 18 = ~$300 million, or about $0.95 / share

 

In 2014 we should see ourselves earning ~$2 M from TBD and ~$3 M from NDX, and hopefully, an uptick in TER cash flows after their acquisition is completed.  Assume $1 M from TER.  Increase of ~$4 M x 18 = ~$372 million market cap., or about ~$1.20 / share

 

In 2015 we have the CSI stream coming online for an additional $7 M of cash flows from the CSI stream.  Likely this will be bought back, but lets pretend it isn't, for now.  $7 M x 18 = $500 M, or about $1.60 / share.

 

A few of these assumptions are a little aggressive (NDX hasn't raised completed their offering yet, TER hasn't completed its purchase, and CSI will likely buy back 50%).  Conversely, the TBD assumptions are quite conservative (we could see $5 - $7 M / annum from these in a couple years at $4 - $5 natural gas), and the TER stream could earn up to $5 - $7 M / annum at peak production.

 

There is a pretty clear path to about a 250% return over the next couple years.  And if the markets tank, all the better so that we can load back up.

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