GREY:VITFF - Post by User
Post by
MVargason Apr 19, 2018 5:18pm
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Post# 27914058
Comments from Louis James on Osisko Investment in VIT
Comments from Louis James on Osisko Investment in VITLouis James is managing editor of the International Speculator and Casey Investment Alert. These are his newsletter comments on the Osisko investment in VIT:
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It’s good to see Osisko charging ahead to expand its portfolio of Canadian assets.
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For $98-million, our company gets a hefty 5% net-smelter royalty (NSR) on the first 97,500 ounces of gold from Dublin Gulch, and 3% thereafter.
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The $98 million (excluding the PP investment of $50 million in Victoria Gold, the selling company) may look like a lot to pay, but the royalty is based on all metals and minerals produced from the property, so our company is also exposed to any exploration upside at the project.
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Additional potential growth through the addition of the Olive deposit (in addition to the Eagle deposit) in particular, looks especially appealing.
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And Dublin Gulch is fully-financed and shovel-ready, so the new cash flow should come online within about two years, which is not a long wait by the industry standards.
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This is clearly Osisko investing in the future, while taking advantage of opportunities to snap up quality assets at what are relatively bargain prices.
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End Quote.
So LJ feels that buying an equity stake in VIT at $0.50/share is a relatively bargain price.
It would be nice to see some insider buying, especially from Osisko where it would make a lot of sense for them to "average down" and have VIT's share price rise to at least 50 cents efore they report their next quarterly financials - otherwise their equity investment will show a loss.
VIT's market cap now at $291 million with $198 million in cash!