Fabled Silver Gold Corp T.FCO

Different scenarios

[elducky]

I have run a few scenarios to value the company. At US$24.77/pound with a 20% premium for sulfate, and no change in resource, the company NPV is C$1.93/share. This means there is a discount of 49% to get to the price of C$0.99.

Using that discount as the bottom end of the range, I get the following share price for different cobalt prices.

10: 0.02 - 0.04
15: 0.35 - 0.68
20: 0.68 - 1.32
24.77: 0.99 - 1.93
30: 1.33 - 2.60
35: 1.66 - 3.24
40: 1.99 - 3.88
45: 2.32 - 4.52
50: 2.65 - 5.15
100: 5.93 - 11.55
You can adjust for the premium/discount for sulfate by picking a different number on the table. My assumption is 20% extra.

This is the same table, based on inferred resource being moved to M+I.
10: 0.45 -0.88 15: 0.91 - 1.78 20: 1.37 - 2.67
24.77: 1.81 - 3.53
30: 2.29 - 4.47
35: 2.76 - 5.37
40: 3.22 - 6.27
45: 3.68 - 7.17
50: 4.14 - 8.06
100: 8.75 - 17.05

Are all of these realistic? No, of course not. The positive catalysts would be:
1. Resource increase in BFS
2. Decrease of the 49% discount. I believe this is high at the moment, as the stock price is a bit low. This discount reflects both risk and NPV discount other than 8.5%. You can adjust either one. As we move to operations you remove the risk portion. I am not certain 8.5% is the correct cost of capital, but don't have a better number.
3. Cobalt prices - It's possible we could stay at the current level for a long time. It's not likely we'd spike to $50-$100 and stay there for long. If we do see stable prices in the mid 20s, it would be wise to get an offtake agreement at that prices.

Expansion of the resource beyond the scope of the current study is also possible, but totally unknown right now.

The BFS should contain a helpful marketing study on the value of the sulfate, being ore pure than other sources.