TSXV:MMY - Post Discussion
Post by
nozzpack on Oct 01, 2024 7:41am
An Appropriate Free Cash Flow Valuation Peer for MMY
With high gold prices, valuations are now shifting to free cash flows which are added to the balance sheet and increases the treasury position.
I refer to JAG ( $5,55 ....$439 million market cap ) as a an appropriate peer valuation model for MMY
I summarize the first 6 month financials for 2024, extrapolating the free cash flows added to the balance sheet to a full 1 year.
POG Received $2355 US
Production. 64000 ounces / year
AISC. $1553 US
Free cash to balance sheet...$33 million US annualized ( $44 million cad )
Shares 0/S.......................................80 m
Free cash flow per share ...................$0.50 cad
Free cash flow multiple ....................44 m / 439 m = 10 times
JAG is an underground gold miner hence the very high AISC which is why I exited a few years ago but Eric ( Sprott ) stayed invested and has done very well.
So, with MMY free cash flowing $28 million CAD on 10400 ounces produced in Q4 , annualized for a full year ( 42,500 ounces per year ) , its current fair value if 10400 ounces are sustained over the next year at June 2024 POG, it's fair peer based share price would be $280 million which at 340 million shares is about $0.80 per share.
At breast plate operating metrics , MMY should produce about 55,000 ounces per year over the next year as a conservative attachment to the $0.80 Fair value.
What most investors fail to notice is just how rich the current cash flows of gold producers are with gold prices above $2300 US an ounce.
Once they do, the hockey stick price explosion will make its appearance for MMY
GLTA
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