Excellon's Market CapThis is getting really bazaar. Excellon's market cap at Wednesday's market close was a ridiculously low US$42.15. To put this in perspective, this sum is only marginally higher than the estimated value of just one of Excellon's many assets, the Otis Gold Property. Based on an analysis made by Seeking Alpha on 2 March 2020(link below), this properties has an estimated current value of US$39.9 million* and could be worth much more if Excellon's planned drilling program, which has already been approved by the USFS, discovers more or higher grade gold material**. To determine Excellon's true market value, I took a cursory look at data on and before early 2018 which was the last time silver prices were close to their current highs and was prior to the San Pedro lawsuit negatively affecting Excellon's stock price. On 10 Jan 2018 for example, Excellon's had a market value of US$163 million, its stock price was US$8.60, it had 19 million shares outstanding and silver was US$17.14/oz. Excellon had similar market values in 2017 and 2016. During those years Excellon did not even own the rights to the Otis Gold and Silver City properties which have high discovery potential and add significant asset value to the company, much more than the cost and/or accrued debt associated with their acquisition. Excellon currently has higher production rates and lower AISC then it averaged for any one of those previous years. There also has been recent resource discoveries in Platosa and Evolucion to offset those depleted by its mining operations. Also, Silver prices are 41% higher now then the were on 10 Jan 2018, making its present market value even higher. Based on this, I beleive a case can be made that Excellon's market value is higher than ever and could be more than 4 times higher than its current market cap. More than 3 times higher if it is reduced by the $23 million which was the judgment against San Pedro. New discoveries should help its market value go even higher. On paper, this looks like an incredable opportunity with huge upside potential.
Estimated current value of Otis Gold Property
*This estimate is based on analysis done by Seeking Alpha on its Otis Gold Purchase in article released on 2 March 2020, link below. This article estimated Otis gold property to be worth US$35 million(US$31.90/oz x 1.1 million ozs) with gold prices at US$1592/oz gold at the time the article was published. Gold closed Friday at US$1821/oz which is an increase of 14% over 2 March 2020 prices. This puts the estimated current value of this property at US$39.9 million. (US$35million x 1.14).
**If the Otis property is found to have higher gold content material in line with median value of $63.79/oz or the ave paid $85.73/oz for other properties, the Otis property could be worth double or more that that used in this analysis.
Key statements taken from Seeking Alpha article link below dated March 2, 2020.
" The price paid per ounce in this deal was well below the 5-period moving average paid for gold juniors, which was at $85.73". "we can conclude that the enterprise value per ounce should have come in at half of the median paid, which was $63.79/oz"
| | It was a rough week in the Gold Juniors Index (), and Otis Gold (OTCPK:OGLDF) was not spared either, despite being the first acquisition in the junior gold space for 2020.We got news on Monday ... seekingalpha.com |