Post by
jclarke042 on Jan 27, 2023 8:42am
StockCopper
To answer your questions:
1. "Is Moly removed from NPV?"
No. The presentation deck just highlights copper/gold sensitivity as those are the two primary metals here. Page 334 of the FS, table 22-6 starts the financial model. A few items of note: 1. Moly is right there with copper/gold/silver. 2. Page 336, at the bottom, provides NPV as several discount.....levels, if you will. Being predominately a copper project, we use 8%, as is standard. Yet, were you to use 5%, typically used in predominately precious metals projects, the after-tax NPV jumps from 2.33 to 4b CAD. Paul's stated a few times, companies, Rio included, use their own financial model to value projects.
The after tax, 8% discounted NPV of 2.33b already considers Moly. They're not short changing Casino's valuation.
2. "Why does a project trade at 2.0x NPV?" Ultimately, market sentiment is all that matters, as I'll discuss more below.
3. "Is permitting the reason for the low price?" No. Permitting risk is rather low, IMO, considering between our management / board, we have:
a) a founding memeber of YESAB, the very board considering our application, b) the lead on Coffee's gold project environmental assessment, c) a two-decade veteran of environmental & FN relations re large scale projects in Canada and d) the engineer who designed a few of Rio's recent copper projects. Apart from the length of time, and possibly some give & take with the FN's, I see little additional permitting risk.
Reason for the low price is simply market sentiment. This story has been around 15 years, with several more before operations. Management does a poor job of communication, of hitting projected milestones on time, and of overcoming market objections to things like CAPEX, grade, and time risk etc.
What sounds like a more exciting trade? "Yeah permitting is still 4 years, once we submit the application at some point this year." OR "Here, we drilled a mile long bit and came up with 1.25% copper. More on the way."