@1.1$/lb Zinc - NPV @5% of Royalty almost double EV?!Hi Everyone,
i am new to GMX. searched for the most interesting ideas for the coming zinc shortage and found GMX.
The whole company seems fairly complex, but seems to be well run given only 43mm shares with no rollbacks after many years in the market.
So i had a closer look at Nyrstars Tenesse Zinc mines and came to the following conclusion:
@1.04$lb zinc, the company estimates 90k per month in RR = annualized 1,08million
@1.1$/lb zinc the Royalty rate increases 40% to 1,4% GSR and the price per pound is 6% higher.
So effectivly as it is a GSR with no deductions that should give GMX a Annual Royalty Revenue of
1.55-1,6 million $
this does not take into account that Nyrstar contiunues to increase porduction. The mine should have a remaining mine Life of at least 10 years, but has a good history of replacing reserves. So the ultimate mine life could be mich higher.
https://www.nyrstar.com/operations/Documents/Fact%20Sheet%20TENNESSEE%20EN.pdfSo
Using a 10yrs mine life, the NPV @5% of the Royalty is: $10,038,255.41
The EV of T.GMX is 6.5-7 $ million, as post financing they have 3-3.5 million in cash and marketable sec.
Looks like you get all other assets, JVs and 38 other Royalties (non-producing) not only for free, but are able to buy a quality Royalty at a discount to NPV...
chrs
teatimenow