Numbers Breakdown in DFSI believe the numbers are largely as expected:
$1.07B NPV = $856M for GENM (80%) = probably a bit higher than most were expecting. 6% discount seems high (higher % = lower NPV) but the $1,725/oz Palladium price seems a bit high to me, was expecting $~1500.
$665M for Capital is higher than anyone was expecting, I think. Gerry did allude to the fact that higher might be better because it means SBSW would have to pay more for their 31% and also because it would allow the mine to recoup costs faster.
AISC of $809 USD/oz seems high to me. North American Palladium was under $600 when sold, I believe.
I personally don't believe SBSW will exercise their 20% to 51% option. That would cost them $206M in the short term, which is probably what they could buy the whole company for.
Basically, right now, the GENM portion of the mine is worth $856M with these IFs:
IF they can arrange financing for $665M (that's a lot!)
IF they can get permitting
IF they can get environmental approvals
IF construction starts in 2022
IF palladium price (and other metals) don't decrease dramatically in price
IF there's not too much share dilution to get the $665M capital
There's still a fair bit of "IFs" right now before this thing makes money. I would say NPV discounted 70% at this stage would make sense. That would be GEMN market cap of $257M. That's up 73% from here ($1.07/share to $1.86).
I wouldn't expect that price of $1.86 to be reached anytime soon. The next significant milestone will be SBSW deciding to get to 51% or not. If they don't, I think that will be seen as a negative. After that, a lot of patience will be required while all the "IFs" are taken care of. Most investors don't have that patience.
I see buying opportunities below $1 in the future.
I can also see this company with annual FCF of $1+/share in the future. Patience will be required.