Nevsun Resources - I Would Buy After Friday's Crash Interesting article on Seeking Alpha
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https://seekingalpha.com/article/3983099-nevsun-resources-buy-fridays-crash?auth_param=qpbu:1bmg352:15f98a8ea957862ff48c6c568cab4616&uprof=22
Excerpt:
Timok Project Upper Zone
The valuation of the acquisition comes from whether the acquisition of Reservoir Minerals is worth $440 million. Under the terms of the acquisition, Nevsun Resources will control 100% of the Timok Project Upper Zone and 60.4% of the Timok Project Lower Zone. Freeport-McMoran (NYSE:FCX) has the option to increase its lower zone ownership to 54%, meaning Nevsun Resources will control 46% of the lower zone. In determining a valuation, we will assume Nevsun Resources controls 100% of the upper zone and 46% of the lower zone.
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Sit on that for a moment.
Nevsun Resources paid $440 million for $510 million in future profits from the Timok Mine Upper Zone's indicated resources. This does not even start to take into account the company's stake in the lower zone which could provide profits for decades once it gets started up or the inferred resources of the upper zone.
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The above provides an image of the reserves at the Bisha Mine. The Bisha Mine primary deposit contains 21 million tons of proven and probable primary reserves. While some of these reserves might have to be accessed from underground mining, which will increase costs, these reserves contain 230,000 tons of copper along with 1,197,000 tons of zinc. At present prices, that is almost $3 billion in reserves.
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Digipic comments
Well, there you go, the market value of the new NSU is significantly undervalued. Low risk downside, tremendous upside
All Aboard The new NSU Bull Express