Pick your dollar
Went looking for the Roxgold board election results, interested to see how many people, like me, voted “withhold”. Sort of a mini-referendum on this “40% premium” deal. Was sorry to discover the Annual Meeting has been postponed until just after the special meeting to vote on the takeunder.
With both parties to this still-birth having reported Q1, I’m rather taken aback by the lack of commentary from posters or citing of analyst comments. Maybe I should break the ice.
Scotia came out with their Q1 review of the Fortuna results and an updated proforma for the combined company over the next several years. Curiously, Scotia sets a 1 year target of US$8 , versus US$6.26 at time of writing. They also reiterate a NAV per share of $3.99.
Earnings estimates fall from 71 cents this year, 66 cents next, 40 cents in 2023 and 28 cents in 2024. To be fair, Scotia is using gold prices of $1850 in 2022, $1700 in 2023, and only $1500 in 2024 and thereafter. Personally, I’m hoping for higher prices than those, but it’s good to see analysis that isn’t totally starry-eyed. For all I know, those prices may prove optimistic.
Draw your own conclusions, but if those earnings estimates are even in the ballpark the proforma un-Fortuna-te has zero chance of ever seeing $8 in Canadian or US currency. More like Hong Kong $.