RE:RE:The gold standard Your question reminds me of a quote I saw when researching the Lassonde curve.
The Two(ish) Most Likely Times For A Major Miner To Purchase A Junior Miner
- The most likely time for a major to purchase a junior mining company is after Feasibility Studies are complete but before construction is underway. This is the optimum time for a major company to acquire the project for the best value/risk ratio.
- The second most likely time for a purchase is as construction is completed/underway but operational excellence still has not been achieved. There is minimal risk but still meat on the bone for the taking.
- The third most likely time is any random Wednesday. Sometimes there seems to be no rhyme or reason behind boardroom decisions.
Artemis and Equinox (Greenstone) are in the second category. Laurion is in the third. They feel they have a story to tell, a promising project and they have made significant strides in de-risking it. Why not float it to see if there is interest? But that isn’t, and should not be Cynthia’s focus. Her focus is keep the lights on and the drills turning.
I agree in general with your basement math, not as a price per geo, but as an overall current value for Laurion of $500-900 million. The float is higher than 267, it is 271 million fully diluted shares and you have to assume that USCG will take a good percentage of the sale price as a commission. Considering the investment Laurion have put in to the Ishkoday, and the fact that the valuation aligns with previous deals USCG has made it seems reasonable.
Do I think a deal is likely? No, but that is just my opinion. The pitch just isn’t compelling enough. When I look at the presentation I see two potentials for an open pit mine. The Sturgeon River Area and the Brenbar. Assuming a 1km open pit at 250 meters, you would need between 25k and 100k of drilling to produce a MRE (inferred at the low end/indicated at the high end) for either. At $250/ meter, between $6-25 million dollars to do the drilling. Laurion’s plans for 2025 are for 7000 meters of drilling at $2.6 million dollars with a focus on the SRM area. Even if they had $25 million dollars right now I doubt they would do the drilling. I think they have a lot of confidence in their modelling but still have some questions around where the most mineralization is. I would hope that after the 2025 campaign, those questions will be addressed and by 2026 there is an MRE and an economic feasibility study.
With an MRE and a EFS, and a 1-1.5 km ore reserve with a resource estimate of over 2 million ounces, I think Laurion is valued at 1.5-2 billion dollars (possibly more depending on gold prices), so while it does represent a good return for PE (buy Laurion for 700 million, put 25-50 million in, flip it in two-three years for double), there is still a substantial amount of risk, and that is why I am skeptical.
I would rather Laurion find a way to raise the money themselves, preferably without dilution (debt financing, selling a royalty stream etc…), but I don’t think that is very likely (yet).
I hope this answers your questions. These are just my opinions, but yes I agree with fatlas. They are taking all approaches and should be able to pivot if and as required.