RE:RE:Carap close >>> Marketwatch... Thanks for your question. For now I will give you a rough calculation.
At $4.50 copper the (7.5% discount rate) NAV is about $3,400,000,000 (yes, 3.4 billion dollars) if you include a decent portion of the construction capital already spent building the underground mine.
Currently there are about 185 million new shares. Pala will have warrants for an additional 15 million shares at an as yet not exactly known strike price. (The strike price will be probably set at the 5 day rolling average before the loan arrangement closes in the next couple of weeks... call it $1.20) Additionally there are about the equivalent of 50 million warrants out at an equivalent of $2.10... currently out of the money.
Let's say the price is $3.00 by year end. Then the two existing series give the company an additional $105 million or so and that needs to be added to the NAV... so a bump from $3.4 billion to $3.5 billion equivalent NAV.
Divide $3.5 billion by a probable total diluted share count of 250,000,000 (without a further equity issuance) and get $14 per share NAV.
The NAV does already deduct the cost of building the open pit and the finance cost thereof.
The NI 43-101 works with a couple of scenarios but here we focus on the 70,000 tpd open pit (which may actually get upped to 100,000tpd.) That pit (on average) will produce 220 million pound per year and the underground (without expanding to 6,500 tpd) will produce about 60 million pounds per annum for a total of about 280 million pounds on average.
So the underground (using this metric) is about 27% of the NAV and the open pit is about 73%.
27% of the $3.5 billion amount is $945 million. Per share (using a fully diluted 250 million) that works out to a NAV of $3.78 per share if you attribute ZERO dollars to the open pit and it's fully permitted status.
This project is so radically under-priced that now no one believes that it is possible. It was all designed to go ahead at sub $3.00 copper. It is massively leveraged to the copper price upon being in production, which no one seems to think (anymore) will happen. Anyway, that is how I see it.
In short, if today NCU were valued by others at $3.00 per share and I only just read about it, I would be buying in big time. Of course that is not the situation and the market is the market.
Good luck, I hope this answers your question to some degree.
Cheers,
Notgnu
Marketwatch6789 wrote: Hi Notgu do you know if the NAV of $3 includes build out of the open pit? It is my understanding that it does and requires an additional 672M to build. What are you thoughts on how they are going to finance this?
Additionally do you know the allocation of the NAV between open pit and the mine?
Short term I am seeing the step at $1.60-$1.65 area. However, Scotiabank just reduced their target price from $1.50 to $1.25 their reasonig being that they do not currently see a clear path to building out the open pit. What are your thoughts? RBC has not changed their target price of $2.
What are your thoughts on stock price in the next 12 months?
Many thanks in advance