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Transatlantic Mining Corp V.TCO

Alternate Symbol(s):  TRRGF

Transatlantic Mining Corp. is a Canada-based precious and base metal explorer. The Company is engaged in the acquisition and exploration of mineral property interests, such as the Golden Jubilee and Miller Mine Gold Property and the Monitor Copper/Gold Property. It has property interests including an 80% joint venture position on the Monitor Copper-Gold project in Montana-Idaho and 100% of the Golden Jubilee Gold Project with its associated mining rights. The Company has an extended lease, right to mine and purchase arrangement for the Miller Gold Mine in Montana. The Golden Jubilee Property is located in Granite County, Montana, about 20 kilometers (km) from the township of Phillipsburg. The property lies on the famous Red Lion corridor. The Miller Mine Gold Property is located in Broadwater County, Montana, about 30 km from the township of Helena. The Monitor Project is located along the eastern extension of North Idaho’s Coeur dAlene Mining District.


TSXV:TCO - Post by User

Bullboard Posts
Post by GUNSSon Mar 03, 2017 2:40am
695 Views
Post# 25924799

Fun facts: TCO valuation

Fun facts: TCO valuationFun facts: TCO valuation

I track stock prices on a Yahoofinance portfolio page on about 400 gold juniors.  About 75 have tripled (or more) from their respective 52-week lows, ~15 are up more than 1,000%.

By comparison, TCO stock is up a whopping 33% from its 3.0c low.  

I look at routine comp metrics like Price/NAV, EV/EBITDA & EV/Cash Flow.  A simple one is EV/Revs, it's an easy apples to apples measure.  Junior producers trade at a very wide range, but looking at reasonable EV/Revs ratios from companies with market caps below $100 M, gets me into the 1x to 3x EV/Revs area. 

TCO says they have the capacity to produce 5,000 to 10,000 Au Eq. ounces in CY 2017.  5,000 ounces x C$1,600/oz gold = C$8 M in revenue. That implies an EV of C$8 to C$24 M =  about 4c to 12c per share.  Gold is currently at about C$1,640/oz. 

However, if management executes well, 5,000 Au Eq. ounces is the first step towards 10,000 to 20,000 ounces in CY 2018.  For example, if TCO were to produce 10,000 ounces in 2018, that would generate C$16 M in revenue, for an implied EV of between C$16 and C$48 M = to roughly 8c to 24c per share.   

Importantly, 100% of options & warrants are struck at between 10.0c & 12.5c.... The stock is at 4c. That means the share price could double or triple before facing serious options / warrants overhang.  By no means am I saying that TCO shares are headed to 24c in a hurry, we have to walk before we can run.  

But, even with more dilution, (the Company is actively looking at debt/streaming deals that would likely require a supporting slug of equity) there seems to be a reasonable path to 8c-10c per share as management ramps up production.  Note, a key reason why the Company is seeking additional capital is to make tuck-in acquisitions (at low upfront cash cost) and then invest in rapid project development and (relatively) near-term production.  Everything they're looking at is high-grade, some are stranded assets in need of TCO's Mill.... 
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