GREY:AQARF - Post by User
Post by
railwazeon Jan 01, 2015 6:55pm
165 Views
Post# 23278386
AQA Analysis From October 07, 2014
AQA Analysis From October 07, 2014 https://www.goldsilverdata.com/company/38-Aquila-Resources-Inc.html Summary
(from last analysis - 10/07/2014) Aquila Resources is developing a gold project in Michigan. Back Forty is a million oz resource (2 gpt), along with
Silver: 12 million oz
Zinc: 1 billion lbs
Copper: 110 million lbs
Lead: 74 million lbs
These offsets make this a likely negative cost gold mine. They plan to mine only 500,000 oz of gold over 16 years. That doesn't seem like much, but cash flow could easily exceed $50 million a year if base metals are in demand and gold prices reach $2500. That could make this a 10 bagger long term at higher gold prices.
The red flag is potential permitting issues. How long will it take to permit in Michigan? That is a big unknown. It has a high capex of $220 million, but they plan to reduce the initial capex to about half that total to get into production. The post-tax IRR is 32% at $1300 gold, so it is economic. The after-tax NPV is over $200 million at $1300 gold. I want to like this stock, but the base metals and permitting make me nervous.
In addition to Back Forty, they recently made an acquisition (REBgold) of gold projects in Finland where they have a JV deals. These could potentially help pay for the capex of Back Forty. And they have their Reef Gold project that has 140,000 oz at 10 gpt. Overall, this stock looks enticing at it current valuation of $21 million FD market cap.