RE:RE:RE:RE:RE:Sprott Capital Partners: MQR Initiating with buy and C1.65$/ Monarch: potential bidding war for 2Moz, stock is just too cheap
We think Monarch is too cheap. There could be a two-way (or more) bidding war for Wasamac’s 2Moz, 25-30koz pa from Beaufor while bonanza grades at McKenzie Break potentially underpin the entire market cap in cash. In neighbouring camps we count >$1.5bn market cap from a few juniors with no mineable gold. As enthusiasm wanes, we expect a re-rate for the ‘real’ assets of Monarch. Our valuation is based on 0.5xNAV for Wasamac’s C$948m NPV, 0.7xNAV C$40m for Beaufor and C$36m for other assets, with the stock trading at just 0.14xNAV