RE:CW my best/worst case scenario'sMonkeydonkey wrote: Had some free time, so i had a little fun with numbers. Just to check novo's valuation at the moment.
CW: 6km - 1km
PPZ: 0.5m 30g/t = 7.5 Moz
Lower conglo: 8m 15g/t = 60.5Moz
Best case: 68Moz
PPZ: 0.5m 5g/t = 1.25Moz
Lower conglo: 3m 3g/t = 4.5Moz
worst case: 5.25Moz
Using my worst case scenario, Novo's is valued correctly (using only CW). Using the best case its a 10bagger. Truth will be somewhere in the middle. I'd put CW at around:
CW: 6km - 1km
PPZ: 0.5m 15g/t = 3.75 Moz
Lower conglo: 4m 7.5g/t = 15.125Moz
Realistic case: 18.875Moz
Fair valuation for Novo (imho), just shy of 2.5B cad or circa 12cad (fully diluted).
Note that herefore i am using a situation that still has to be proven, but i am only using 0,05% of their total land holdings...
I like this kind of theorycrafting MD (as you probalby know),
I think your base case is a good one and that it jives with the thought that if the lower conglos comes in around or above the metrics you stated that it will ignite some serious FOMO... And that's just for CW.
The market still seems very fixated on just that sliver of land at CW (outcrops and a small down dip strike). IMHO this is where I think the opportunity lies. If one listens to QH, he is expecting this to "play out like the Wits", and if he is correct, then the market is obviously pricing in a tiny fraction of the inferred gold in Karratha.
Novo and the Pilbara case is like a black swan. There is only one datapoint in history to potentially compare it with (The Wits), and no one was here when that gold rush started. Karratha is still being value pretty much as a local freak show at CW/Purdy's IMHO and my hunch is that this will be proven false.
My expectations are $6 pre CW bulk samples, around $10 post bulk samples and then I don't even want to say where I think we will be at years end. Imagine if CW is close to or above your base case... And then add the fact that Novo's presentation stated that they will focus on proving up more targets all around Karratha in 2018.
... And what IF (still big if) Artemis hits anything in the same stratigraphy tens of kilometers down dip? Then we can potentially ad a multiplier of 30+ to that inferred base case. It can get really "weird", very fast , in a good way. Hell, we have no idea what they will find drilling through 3km+ of strata. Maybe the Harder Formation becomes a valid target too since the paleo-currents were probably more favorable in this part of Pilbara. And how thick etc might the Mt Roe targets be down there? Algal mats? Some kind of feeder source? We have no idea.
/THH