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Rathdowney Resources Ltd V.RTH

Alternate Symbol(s):  RATHF

Rathdowney Resources Ltd. is a Canadian company, which is primarily focused on developing and permitting its 100%-owned Olza zinc-lead-silver development project in Poland. The Olza zinc-lead-silver development project is located in the Upper Silesian Mining District of Poland, historical drilling indicated the presence of extensive Mississippi Valley-Type zinc-lead deposits in the project area. Project Olza is located north of the nearby Pomerzany Mine. The Company intends to advance project evaluation and development planning and to support permitting as outlined for projects in Poland.


TSXV:RTH - Post by User

Bullboard Posts
Comment by edxon Jan 25, 2013 7:22pm
118 Views
Post# 20892764

RE: Dundee initiates coverage on RTH

RE: Dundee initiates coverage on RTH

Heh, I really like that Dundee analyst report, mainly because (the full version) says the average historical take out valuation for zinc plays is $0.08 per lb ZnEq. It then goes on to value RTH at $0.52 / share fair value (includes cash and other assets as well) but notes that to come up with the $0.52 fair value per share it is presently valuing RTH's ZnEq resource @ $0.01 per lb ZnEq - 8 times less than average.

 

So if we assume Dundee's analyst is right, some basic extrapolation and the hypothetical average takeout value of RTH right now is north of $3.50 / share. That's only with the current compliant resource estimate.

 

And since we're in hypothetical territory: even discounting the known zinc mineralization in the Chechlo concession entirely, I'd bet pretty big that RTH expands the compliant resource at Olza to approximately 30MT @ similar grades. So our daydream take out price rises to over $5.00 / share on Dundee valuations.

 

Then we factor in significantly higher zinc prices by the time RTH reaches takeout territory and we're going to da moon! Of course, we would also have to factor in the hypothetical dilution down the road as well as global economic conditions which are unknown which could depress valuations and M&A prices. And then there's the inherent junior risk of death by cash-flow... but I've never picked that kind of loser and I don't expect RTH will be my first.

 

Of course, this is all a nice fiction. But hell it's Friday and I'm going to allow me to delude me today ;).

Bullboard Posts