Great Bear Resources Ltd. GTBDF

RE:Cormark report

[goindeeper]

Good eye.  I caught that as well.  All they need to change the target price to $20 is the resource estimate, which we know is a done deal next year.  So automatic 25% share price gain for finishing up the drilling and putting out the report.

Or add in concurrent u/g mining at hing & limb gives $20 at NAV7% as well "Building on ourbase case (open pit) mine plan, we note (for illustrative purposes) that a concurrent (2,500tpd) underground operation (2028start-up) exploitinga 2.0MMoz of ‘in-situ’ gold inventory grading 4.0g/t stands to boosttheDixieProject’s production profile to ~500koz per annum in ourconceptual model (see below), and increase Great Bear’s fully financed after-tax corporate NAV7% to US$1,688MM or$20.45per fully diluted share.

I think they have been quite conservative in their 10 MOz estimate.  Note that their target price is based on open pit of only 300m depth x 3000m length x 150m width x 0.8g/t LOM grade. For contextual reference, our modelled 10.0MMoz modelled mine plan would require delineation of an openpitable deposit spanning ~3.0km in strike length, by ~150m in‘width,to a depth of ~300m—dimensions already (more than) demonstrated by drilling to date(seeabove).We also remain cognizant that LPFault production could/would eventuallytransition to an underground operationas mining progressedto depth. However, for simplicity, our formal (conceptual) base case valuationexcludes undergrounddevelopment consideration

Something very helpful is that they have actually modelled the drill data in leapfrog.  Hopefully indicating a 150m average width is based on that model.  Regardless, they provide some increased confidence in using that dimension going forward, which was one of the harder dimensions to estimate.  Similarly, 0.8 g/t gives a higher confidence number than the 1 g/t I have been using up unil now.

flashcash wrote: ...Our $16.50 target price (Buy (S) recommendation) is based on a 1.0x multiple to Great Bear’s risk-adjusted, fully financed after-tax corporate NAV7% of US$1,358 MM or $16.45 per fully diluted share (2020 forward basis with production start-up modelled in 2025)—versus Cormark’s standard practice of using a 5% discount rate for precious metal projects with compliant resource and/or mine plans (noting peers trade up to ~1.0x NAV). Said valuation is underpinned by Cormark’s formal commodity price forecast, which includes a long-term gold price of US$1,600/oz.

...We note that at a 5% discount rate, Great Bear’s fully financed after-tax corporate NAV increases to US$1,614 MM or ---$19.54---- (+19%) per fully diluted share in our model.

Don't go cheap on us !

GLA