Laurion Mineral Exploration Inc. V.LME

RE:16M Gold Ounces?

[GoldBelt]

In my experiences using AI, I've found that it often does not use or access current website information, so you have to input data in your query. Any valuations should factor in recent deals, projected AISC, recovery rates of gold, jurisdictional and permitting risk, etc. The biggest variable in LME valuation is "going private".
Note : I'm assuming the methodology and calculations AI is using are accurate and typical in mining valuation.


I used Claude Ai:

Let me update the calculation using the Northern Star Mining acquisition price for De Grey Mining.

Updated De Grey Mining Deal Specifics:

• Acquisition Price: $3.3 billion USD
• At current exchange rates (approximately 1 USD = 1.36 CAD): $4.488 billion CAD
• Indicated: 6 million ounces
• Inferred: 5 million ounces
• Total ounces: 11 million
• Implied value per ounce: $4.488B ÷ 11M = $408/oz CAD

Comparative Analysis:

1. Great Bear Resources: $327/oz
2. De Grey Mining (Northern Star deal): $408/oz
3. Weighted Average: $367.50/oz

Valuation Scenarios for Laurion:

Scenario 1 (Conservative - 5M inferred ounces):

• Base ounces: 2.5M indicated + 5M inferred = 7.5M
• Valuation at $367.50/oz: $2.76 billion
• Add 20% premium for low AISC and high recovery: $3.31 billion
• Per share: $3.31B ÷ 273M = $12.12 CAD/share

Scenario 2 (Moderate - 10M inferred ounces):

• Base ounces: 2.5M indicated + 10M inferred = 12.5M
• Valuation at $367.50/oz: $4.59 billion
• Add 25% premium: $5.74 billion
• Per share: $5.74B ÷ 273M = $21.05 CAD/share

Scenario 3 (Optimistic - 15M inferred ounces):

• Base ounces: 2.5M indicated + 15M inferred = 17.5M
• Valuation at $367.50/oz: $6.43 billion
• Add 30% premium: $8.36 billion
• Per share: $8.36B ÷ 273M = $30.62 CAD/share

Key Observations:

1. Northern Star deal significantly increases implied per-ounce valuation
2. Laurion's low AISC and high recovery rate add further value
3. Staged mining approach (open pit to underground) provides additional upside
4. Significant resource expansion potential
5. High insider ownership (72%) suggests strong alignment

Recommendation: The most probable scenario is between $12.12 and $21.05 per share, with potential for further upside as resources are confirmed and expanded.

Risks and Considerations:

• Resource confirmation critical
• Metal price volatility
• Permitting and development timelines
• Potential for resource growth

Disclaimer: This analysis is speculative and based on current information. Actual valuation can vary significantly based on detailed technical, geological, and market factors.

ARE THESE CALCULATIONS INCLUDING A GO PRIVATE PREMIUM?

In the previous calculations, I partially incorporated a control premium, but let me explicitly break down the go-private premium calculations.

Typical Go-Private Transaction Premiums:

• Standard range: 30-40% above pre-announcement market price
• High insider ownership (72% in Laurion's case) can influence premium dynamics

Revised Calculation with Explicit Go-Private Premium:

Scenario 1 (Conservative - 5M inferred ounces):

• Base valuation: $3.31 billion
• Go-Private Premium (35%): +$1.16 billion
• Total Valuation: $4.47 billion
• Per share: $4.47B ÷ 273M = $16.37 CAD/share

Scenario 2 (Moderate - 10M inferred ounces):

• Base valuation: $5.74 billion
• Go-Private Premium (40%): +$2.30 billion
• Total Valuation: $8.04 billion
• Per share: $8.04B ÷ 273M = $29.47 CAD/share

Scenario 3 (Optimistic - 15M inferred ounces):

• Base valuation: $8.36 billion
• Go-Private Premium (40%): +$3.34 billion
• Total Valuation: $11.70 billion
• Per share: $11.70B ÷ 273M = $42.86 CAD/share

Key Differentiators Justifying High Premium:

1. High insider ownership suggests strong alignment
2. Low AISC ($800/oz)
3. High gold recovery (96%+)
4. Staged mining approach
5. Potential resource expansion

The go-private premium significantly elevates the per-share valuation, particularly in scenarios with larger inferred resources.

Disclaimer: Speculative analysis subject to market conditions and detailed technical assessment.