Mineable Reserves Valuation"The recently announced Marimaca pit-constrained mineral resource estimate of 145,500 tonnes of copper in the measured and indicated categories and the 99,300 tonnes of copper in the inferred category provided the resource confirmation necessary to validate the decision to acquire the Ivan processing plant." (source: Coro Mining Jan. 2017)
At current US$6,000/tonne or $2.70/lb Cu, the Gross Valuation based on indicated reserves for Marimaca and Berta is likely Can$1 billion (no. of tonnes multiple by US$6,000 with rounding errors and exchange rate). On a Net Present Value (NPV) basis at a discount rate of 8% over 8-year mine life, it is estimated Gross Revenue would come to a NPV of $540 million - before mining costs, taxes, royalties etc. - or slightly over $1/share.
Fully ramped up in 2019 and thru' doubling of the output at the Marimaca Ivan plant to 20 ktpy, Coro will likely be in the same league as Teck's Quebrada Blanca and Anglo American's El Soldado mines in Chile. Although small by industry standards, they are profitable mining operations for Teck and Anglo. Also, Chile has no new Cu discoveries for many years. Coro has now received the requisite permitting for Marimaca. Berta is keyed up to produce at end of Q1, 2017 at 5ktpy
The additional upside for Coro is exploration on the claims covering 38,000 ha. of virgin grounds held by Ivan (presuming the deal is closed shortly).
I still believe that COP would be in the cross hairs of one of the major miners such as Teck, BHP, Anglo, Lundin or First Quantum. The only way for Greenstone Private Equity to cash out or exit their majority investment is by way of an acceptance of a takeover bid. There is no way they can dump or liquidate into the market. At say 50 cents takeover price, they would make $130 million on their $20 million equity investment and at up to $1, the profits would rise to $280 million. As was discussed here before, Greenstone can force a squeeze-out of minority shareholders within the framework or ambit of the Canada Business Corporations Act. Greed is good, greedy is not.