The Lassonde CurveIf you think Laurion is a unicorn this post is not for you. If your analysis is I heard it from a friend who got it from an insider or you read it on reddit that gold grows out from the Ishkoday like weeds this isn't for you either.
The Lassonde curve is a graph of the junior minor lifecycle and shows the opportunities for value growth at defined stages in that cycle. My argument based on publically released documents from Laurion is that Laurion is between the discovery and feasibility stages of the curve.
You may believe that Laurion is further along in the lifecycle, but this post is based on validated publically released information including the Property of Merit. The conclusion of the Property of Merit is that further exploration is warranted. That's it. But it is something.
The Tier One properties I talked about in my previous post are in the ramp up stage. They represent the lowest risk to reward ratio and that is why I think they will be the first targets for acqusitions.
If Laurion is selling all of it's assets to private equity at this stage, it will be private equity that makes most of the gains, as they will carry the most risk. Private Equity is represented on the curve as Institutional Investors.
I am not saying Laurion will or will not be acquired in the short term. I am saying that based on Laurion's publically released documents and the analysis of the curve, the comparison metrics to value Laurion is not what Agnico or Barrick paid per ounce for a mine, but rather similar to what Orion Mine Finance paid for the Hadrock (Greenstone). It is a good comparison not only georgraphically, but also because there are multiple in the last couple of years that allow us to value it at different stages.
For whoever moonlights on reddit, comparing the Ishokoday to the Greenstone and adjusting for the increase in gold prices and inflation is how I cam to my number which is a valuation of $500m-1 billion. That leaves enough taste on the other side. (Kevin O'Leary...cause that's what private equity is). It's a 1.7-2 billion dollar investment with a payout in 2-3 years on an acquisition to a major.
The issue I have with this plan is I cant think of anyone better than Cynthia and her team to do it. However you value the data room, equally value what;s in Cynthia and Rick Cote's head. I would prefer that we were getting a strategic investment, a capital infusion with a plan to make it a Tier One asset. Then, absolutely I could understand the values and numbers that are floated here.
If "it's business as usual till it isn't", here's my business question...where is Laurion on the curve?
If the image doesn't display, the link is
https://miningexplained.com/the-lassonde-curve/#