ValOre Metals Corp V.VO

Pedra Branca Evaluation ?

[andre171]

The useful question is to evaluate Pedra Branca. What is your estimate? In my opinion, this project is worth much more than VO's current capitalization ( 12M CAD), but at this early stage of the project we could only retain a small percentage of VNP.

[17Digger]

The 2022 NI 43-101 inferred resource of 2.198 Moz 2PGE+Au gives Valore a present capital value of 12 million C$ at current share prices. This works out to 18.3 cents per ounce. If you assume that they will conservatively double this inferred resource to only 4.4 million  2PGE+Au  ounces and also contirm them as proven resources, this would make the capita value 24 million

[andre171]

I don't understand your calculation. For the current capitalization of 12M CAD and resources of 2,198M, this gives an average of 5.46 CAD per ounce and not 18.3 cents, does it seem to me?  An operating profit margin of C$100 per ounce PGE + seems to me a minimum that would leave a profit 18 times higher than the current capitalization, without taking into account a probable increase in

[17Digger]

2.2 million ounces / 12 million cap gives 1 ounce valued now as 18 cents of captial Of course cap amount changes with share price and share quantity  - but if you holld share price and share numbers constant then you understand my method of crystal balling the dramatic effect of future cash flow per ounce. Hope this helps xx

[andre171]

I still don't get it.  You reverse the terms of the equation, you have to do 12M/2.198M to get the capitalization per ounce!  

[17Digger]

Yes  I misstated it in my explanation  What I meant is that $1 of capital value now gets us .18 of an ounce of PGE metal - and if share numbers and share price remains constant but we double our known reserve then we get . 36 of an ounce which I think will get mined with at least a $100 C operaing margin. I am hoping this current exploration program can prove that reserve.level or most

[andre171]

Once again I have difficulty understanding because 5% of 2.198M ( 43-101 of 2022) gives 109900 ounces and not 210000? Could you provide ( possibly by private message if you wish) a link to this valuation by an analyst from another PGE company in Ontario at 5% of proven ounces? RedCloud in May valued Pedra Branca's NPV at 86.93M while VO is currently capitalized at 11.18M! 

[17Digger]

typo it isshould read 110 thousand. Here is the linkto the article on the other company https://stockhouse.com/companies/bullboard?symbol=v.vo

[andre171]

Your link goes to the same VO forum!?

[17Digger]

Since the link is unavailable here is a brief exract from the report on the company CNRI which is also seeking similar metals in Ontario as Valore is seeking in Brazil. We are maintaining a Speculative Buy Rating on CNRI and increasing our one-year Price Target to $5.25 from $5.00. We have slightly adjusted these valuation factors from the last report: Updated commodity price estimates

[andre171]

Thank you for your reply. They estimate their target price over one year at 5% of the value of ( 75% of measured resources +50% of indicated resources). I accept this basis among others. It would value ITRG at 589.9M CAD for a current capitalization of 96M.

[andre171]

I mistakenly mentioned ITRG in this post about VO. Sorry about that!

[17Digger]

So, where do you think this resource evaluation method would price Valore shares at using current resouces estimates for Valore?

[andre171]

+- 90M CAD seems to me, but check this calculation! However, I would prefer an NPV-based valuation as this would take into account the profitability and specifics of the case, whereas the resource-only valuation is too general. I don't think an NPV has ever been released for Pedra Branca.