GREY:OGLDF - Post by User
Post by
Super_Cycleon Nov 29, 2018 4:53pm
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Post# 29042076
PI Update - Unchanged - Target .60
PI Update - Unchanged - Target .60PI Reccomendation Unchanged This group of environmentalists is over reaching by taking the US Forest Serives to court imo. Otis has had a long standing and intensive relationship with the US Forest Services and they have very high environmental standards.
The selling in junior exploration stocks has been relentless this year. Anything under .14 is a bargain imo.
Cheers
Research Flash for November 19, 2018
Kilgore Permit in Good Standing as USFS Underfire.
Otis Gold Corp. (V-OOO) $0.14
Recommendation: Buy (unchanged), Target: $0.60 (unchanged)
Event: OOO was recently notified that a complaint was filed against the United States Forest Service (USFS) by two environmental groups after the USFS approved a 5-year Plan of Operation exploration permit at the Kilgore project (New 5-yr. Drill Permit = Significant Resource Expansion Potential).
Impact: Neutral. No action has been taken against OOO as the complaint has been lodged against the USFS and therefore the existing permit remains in good standing (approval received August 23, 2018). The USFS is confident that they have taken all the necessary steps before approving the Kilgore Plan of Operation permit.
Details:
• The complaint was filed on Nov. 13 against the USFS in the District Court of Idaho by Advocates of the West who is representing the two environmental groups; Idaho Conservation League, and Greater Yellowstone Coalition.
• The conservation groups want a more thorough Environmental Impact Statement (EIS) conducted before any exploration work continues as compared to the Environmental Assessment (EA) that was approved.
• An EIS is only deemed necessary by the USFS if the issuance of a permit will significantly affect the quality of the environment. An EIS is typically for advanced stage development projects that will have broader permanent changes to the landscape and not exploration project such as Otis Gold. The roads and drill pads OOO intends to build will all be reclaimed after use.
• In OOO’s case the USFS assessment concluded Findings Of No Significant Impact (FONSI) determining that an EA was sufficient for the exploration plan proposed by OOO.
• Next Steps: OOO will continue to maintain an open channel with all parties involved while developing a formal action plan to mitigate any potential delays of drilling in 2019 if necessary. Exploration work will continue as normal at Kilgore unless notified otherwise.
Valuation: PI estimates a NAV(8%) for Kilgore of ~US$52M or US$0.32/share, and US$30M or US$0.18/share for exploration credits adjusted for G&A + exploration burn (-US$11M (US$-0.07/share) which justifies a total NAV of ~US$71M or US$0.44/share (C$0.57) adjusted. On a NAV basis, OOO trades at ~0.32x Adj. NAV. To derive our target, we apply a 1x PNAV weighting to justify our C$0.60 target price. |
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