RE:new article - i80s gold seeking alfaSo, while there are many moving parts, and it's hard to model this far into the future with total confidence, I see the possibility of 600,000+ ounces in the upside case by 2030. Normally, I would be skeptical of a growth story this unique. Still, the team has been over-delivering on promises by miles to date, so I think it is worth modeling what the upside case could be here. In the upside case, this is a company with a net asset value potentially north of $2.40 billion by 2028 once the continued exploration success starts moving ounces into the resource/reserve category. Hence, longer term, I see the potential for a share price of US$7.50+ if the CRD opportunity at Ruby Hill pans out and i-80 can execute successfully on its growth.
To summarize, I don't recall the last time I saw an opportunity this interesting outside of Kirkland Lake Gold in 2017. While it might seem too good to be true and a complex story, it's a relatively simple Hub & Spoke model that's been employed on the neighboring trend, with multiple mines feeding a centralized plant (McCoy Cove, Granite Creek, Ruby Deeps set to provide feed for Lone Tree, with incremental production from the 426 Zone at the existing CIL Mill at Ruby Hill). The bonus to the thesis, of course, is the CRD potential, with the possibility to process this on-site by retrofitting the Ruby Hill CIL Mill, which looks to be completely ignored by the market despite world-class grades in first-pass drill results at Hilltop.
Given that I see i-80 as a top-5 exploration story and the top emerging producer from a growth standpoint, it is my favorite idea in the sector. So, if we see further weakness in the stock, I would strongly consider adding to my position. However, given how special this story is, even if the stock does continue to trend higher, this is a name where I'd be comfortable averaging up on my position. This is because even if it rallies 25% from here, it would still be trading at a fraction of its long-term potential if the team can execute. Hence, I believe the sector-wide weakness has given investors a gift, keeping a lid on a stock that could easily be trading over US$3.00 already based on its exploration success to date.