Fair valuation Rovina: CAD 0.35 and 0.54, tends to be lower
I refer to the calculations of yesterday's contribution to Stockhouse:
Rating Rovina with AISC / Gross Margin and AuEq from 17.4.2019
Link: https://stockhouse.com/companies/bullboard?symbol=t.esm&postid=29638191
Meanwhile, open points such as AISC net copper at Rovina and NSR 2% have been resolved. For the calculation of the current enterprise value, I additionally refer to the following two NRs:
1. Euro Sun Mining Inc Announces Up to $ 10 Million Marketed Financing from Jan 29, 2019
Link: https://eurosunmining.com/news/index.php?content_id=286
2. Euro Sun Announces Private Placement of 4 March 2019
Link: https://eurosunmining.com/news/index.php?content_id=290
Basis for further calculations:
Rovina:
- 10m AuEq
- $ 60m per year gross margin
Chapada:
- 21mAuEq
- $ 200m per year gross margin
- Purchase price $ 1b
Compared to Chapada, Rovina has 50% AuEq and 30% of Gross Margin. On average, Rovina has a value of 40% of Chapada. This equates to $ 400m at the time of commissioning the full capacity mine of 7.2m tons per year.
In terms of time, this ideally looks like this without frictions: 2 years to design approval, 2 years construction, 1 year commissioning and start-up and ramp-up. Total 5 years. Earliest 1.1.2024.
Calculation of the fair value of Rovina as of 18.4.2019:
$ 400m base
$ 350m minus CAPEX
$ 50m net
CAD 66m
CAD 17m costs up to operational mine (20m planned, 3m funded)
CAD 49m net per 1.1.2024
This will take another 5 years. There can be a lot happening. In particular, Rovina needs the environmental permit, the construction permit and the operating license. GBU with Rosia Montana has failed the environmental permit. That's why a potential investor makes a valuation discount of 25% to 50%.
Today's fair value is CAD 25m to 38m. For 71m shares: CAD 0.35 to CAD 0.54. This value equals plus / minus exactly the financing of 4 March 2019 with CAD 0.30 and warrants with CAD 0.50 in 2 years. At this time, the figures of the PEA from April 1, 2019 were known.
The most important factor in these calculations is of course the gold price. Assumption is $ 1,300 per oz. At the April 1 PEA, ESM expects a price of $ 1,325. Today, the gold price is $ 1'275 - a reduction of 3.8%. Look at the Senisitivittsanalyse (graphically) in the technical report of April 1st - I guarantee an aha! Effect. This means that the fair value for Rovina with this gold price is even lower.
A significant increase in the price of gold also has a very positive effect on the value of Rovina. However, if the price of gold falls by around 10%, the value of Rovina will decline to CAD 0.0x.
Of course, there are always exaggerations up and down. Once again: Everyone has to judge for themselves whether he wants to believe the paid pusher media and users like CeFaci or not. Everyone is responsible for their investment decision (buy, hold, sell).
urai58