So what is Sherrit worth ?The recent NI 43-101 assess MOA at NPV 812 M USD or 1,100 M CAN. So Sherritt quote share 550 M which is quite close to the current EV (market cap + debt).
So is Sherritt fairly valued ? What are the plus and minus ?
The obvious minus is of course the cuban factor. What should be used ? 10-20-50% ? Make your pick.
What are the the plus ?
A) Nickel price
The NI is quite conservative at 7.12/pound. Bumping it to $ 9 basically double their NPV. Considering that Nickel is currently around $ 11, one could infer that $9 is quite conservative. And if one is bullish on nickel (why else should you be in Sherritt ?) the torque appears quite impressive. At 11, what is the NPV value ? Seems that we have some serious blue sky here.
B) Moa expansion
This is coming very fast, should be completed next year. What is the value of this expansion with 6.5 KT nickel ?
C) Energas
I would value this at 0 but they will receive 350 million in the next 5 years. This is worth something.
D) Tech
Value at 0 but a nice kicker now that commercialisation is underway.
E) Debt repayments
They should be able to get some discount on it when they repay it.
All this to say, that if one's idea is to protect his downside, seems to me that there is a lot under the current share price and then some. Plus you have all the upside. Let see our activists in action in the next couple of months.
GLTA