Notgnu wrote: Rock... when I started purchasing last year(around last year's dip to 6 cents) my only thought was that NCU was a baby going out with the bath-water and that it would probably not actually get sucked though the drain.
A month or two later I stated, and stuck to, a 12 month target of (today) $4.50 to $6.00. Since then copper has done better than I expected and the situation at the mine (whatever the reason... the dike etc) took longer to right side than I expected. I still (for various reasons that seem to annoy people) believe this project is worth multiples of its current trading price. That said (and as the devil stated) management / the team need to execute ahead of stated goals rather than always underwhelming... that is psychology of the market and it clearly has played out here big time with this second deep share price dip to 50 cents.
I look at fundamentals and at alignment of incentives. If NCU were 99% public holder owned I would have run away long ago. The fact is (and more so since the last rights and options issue) that everyone is now in the same boat and if all goes well the leader (new CEO) will get everyone to paddle in harmony (and in the same direction.) That would give a fighting chance at execution and thus positive sentiment. The price (not value) of this project is now so beat down that even modest encouragement on production targets and liquidity concerns will uncoil the spring. We already had a taste of this upon the last news release of the hiring of whats-is-nutz.
I have never been worried about BR or BP related to the recent events (crossing the dike etc.) Pala has been super supportive of this project and from what I can tell is a decent, normal course of business, type of actor here. If you were to lend the company big tranches of cash I suspect you would want your 8% + return also. In fact you, or I, would probably want more and we would want higher protections then Pala has been taking.
What does all this mean? Well, there are several ways to calculate the long term worth of this project but when the dog is so big and the tail is so small, then a slight tail wag swings this dog around big time. Personally (as you know) I do not think of this project as a dog but until the market prices it higher the tail will swing it around like an 80 pound woman at a dosey-doe.
$220 million (maybe soon to be $250 million) of debt and only $150 million market cap is what I mean. When shares trade the market cap changes and when the NAV is about $3 billion and the replacement cost is about $1 billion, then this sucker can double, triple or quadruple in a New York trading room minute. 70 cents can quadruple to $2.80 and the MC goes to $600 million. That is still about one 5th of the NAV at today's copper price (and given the outlook and the security of being in Nevada USA.)
So $1.50, $3.15, $2.50, $7.50 (free trip) are all on the table right now... as is 50 cents.
If you want a clay pidgeon, short term target price for the end of the year I am calling for $2.50 to $4.50 (but $4.50 now looks more like spring 2022 (the visibility on 5,000tpd having been secured.)
The price of copper and the terms of debt along with production ramp-up having been put on course will dictate this. And yes, A $10 to $30 price is also possible but that will take longer, may involve a realistic JV partner or the long term copper price outlook to be $4.50 to $6.00
Cheers,
N
rockhound3 wrote: I say this given that 31.5 cents was the top price in the last yr =before the 10:1 consolidation
If NGU or others who study the issue could comment =taking into consideration the recorded book value PLUS the estimate FAIR VALUE of the unrecorded value based on other miners including both the mine and most importantly the deposit both MEASURED and INFERRED!
This is what I would expect the sophisticated investor would normally be doing!?
My expectation is that the Expected Value is more like in the range of $ 10-30 per share ie $1-3 pre the consolidation!
Comments appreciated!
Rock