RE:Great report Conclusion
Vanstar Mining is in an excellent position. Money is tight for most junior exploration companies and it doesn’t really look like a financing window will be opening soon. Fortunately, Vanstar’s agreement with IAMgold on the Nelligan project was a well-negotiated deal and Vanstar’s 25% stake (which will be reduced to 20% upon the completion of a feasibility study) will be carried to production. IAMgold will take care of the entire construction cost and funding and Vanstar will repay its 20% stake from the operating cash flows that will be generated during the mining phase. This puts Vanstar in an excellent position as IAMgold is currently funding every single dollar that’s being spent on Nelligan.
At the current share price of C$0.31, Vanstar’s market capitalization is C$17.9M. This appears to be pretty low for a company that will likely end up with a 20% carried stake in a deposit that already contains a combined 5.6 million ounces 2 million indicated, 3.6 million inferred) in a pit shell. As of the end of March, Vanstar had a positive working capital position of C$2.65M so there doesn’t appear to be an immediate need to tap the equity markets to raise money.