Gold Project Rovina: My investment thesis
This week came the long-awaited PEA; and she disappointed, especially considering the IRR Post Tax of 13.5 percent. However, the isolated consideration and assessment of the IRR does not do justice to the multi-generation project. The published PEA considers only the 1st phase with COLNIC where the main part of the CAPEX arises. For better judgment, other indicators and factors should also be considered. In my view, these are the following: - Expected margin at EBITDA 50 percent - Ability to repay the entire debts of about 50 percent of CAPEX in the first phase and write off 50 percent - In the 2nd phase with ROVINA the remaining 50 percent of CAPEX write off and potential dividends In the 3rd phase with the main deposit CIRESATA a cash cow. - Simple geology, flexibility in mining, as switching between the 3 deposits is easily possible. - Potential for optimization by mining the higher grade zones at 20,000 tpd. - For the mining of the low-grade zones, it would be possible to increase the capacity to 40,000 tpd. Depending on the upgrade of the grant and a positive 2nd ESIA. - The risks of jurisdiction are decreasing: Romania is in the EU and with Canada is the CETA agreement (investor protection) and Romania is in the process of modernizing the mine legislation and making it more attractive to investors. - Stanija's potential is disregarded - Also a substantial stake in Wilhelmina Minerals with good potential in copper and Zinc in Scandinavia The decisive factor will now be whether institutional investors see it that way and ensure financing once up to ESIA and FSO on acceptable terms. Rovina is too complex to capitalize on a public sales prospectus to understand well and to recognize its potential, especially if looking at the IRR in isolation. In addition, I hope that Forbes and Manhattan has finally recognized the signs of the times and ceases to give mandate to each other well-endowed advisers and ceases to waste capital on expenses (eg in exploration without drilling) and make investments that are not urgently needed ( eg Wilhelmina Minerals). With the respect of Scott Moore for the Transatlantic Investor Group and the concession to a constructive-critical dialogue, a first positive signal is set. Scott Moore and Forbes and Manhattan can now prove that he and F + M are worth the money, even after a fair share of the CAD $ 22 million for 2019 to publication BFS, even for existing shareholders. urai58