North American Palladium Ltd (New) PALDF

Metals & Mining Industrial Metals & Minerals

North American Palladium Ltd is a precious metal mining company. The company operates the Lac des Iles palladium mine located in Ontario, Canada, which is one of only two primary producers of palladium in the world. The group believes there is exploration upside near this location, and the limited number of primary palladium production areas also offers investors exposure to palladium prices. The company generates the majority of its revenue from metal sales, including gold, nickel, copper, pall

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North American Palladium Ltd (New) > Fair Value for PDL shares

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Post by SmokinWillieon Feb 27, 2019 7:56pm

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Post# 29420745

Fair Value for PDL shares

The company has stated they expect to produce approximately 220,000 oz of payable palladium in 2019.

They also expect AISC to come in around $800/oz (Note: AISC is approximately $100 higher than last year due to increases in sustaining capital investment and project capital)

I am assuming a price of $1,500/oz for palladium in 2019 although I expect it to go higher. (to be conservative)

I am also assuming approximately 60 million shares o/s and a 25% tax rate.. So

220,000 X ($1500-$800) = $154 million/60 million shares = ~ $2.50/share EBITDA

$2.50 X 75% X P/E of 20 = $37.5 present day value, possible $50 by the end of 2019

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