RE:Zorg Stock Pricebovalena wrote: Zorg, I have one question? The $6.17 Candian stock price is based on cash right? How does a PE fit into the equation? As the company would just hold a depleting assett (the 1% royalty on TC). These other companies are engaged in enterprize and growth and expanding operations ect?
I don't assign a PE to the sale of T/C since it's a one-time event. I assume a one-time spike in the stock price at that point because the earnings would be huge for that year.
For the recurring 20 year NSR I assign the PE of 25 to the annual $10 million of income (.1667 per share * 25 = $4.17). Reasons are: 1) It may or may not be a depleting asset. The operator of the mine will try to extend the life by finding more reserves and I think T/C has plenty yet to find 2) There could be a one-time dividend from the sale of T/C, but there could also be an ongoing dividend from the NSR income. 3) Teuton has 28 years to find the next large deposit and tee up one or more additional NSR revenue streams. There are too many possibilities to cover in one post, but I particularly love the Pretium options (Pretium is now getting much more busy with exploration), Fiji/Tonga (Homestake is right on the boundary) and a couple of the Tudor options. Also, Teuton will have some cash on hand if a great opportunity comes up at a good price - I expect to see some new properties come into the picture near the Kyba Red Line with KK, Dino and Big Ed providing the analysis and direction. 4) Teuton will have an established track record of finding elephants in the GT. 5) The GT itself will only get hotter as more exploration money is spent up there and more discoveries are made.