What's the future look like for Heron post-raising, page-19

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Wyman Wells

315 Posts.

01/07/17

00:00

Post #: 25602060
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Originally posted by FiendishRedbeard ↑

miningmad

Think you have answered your own question, the market cap (including debt) is not far from the current project NPV making limited sense to be bullish on the upside. I don't include cash as this is largely sunk in this case. You can then easily argue the current sp is fully valued including project risk of restarting an old mine and tailings retreat plant.

So why have the funds pushed in? Small old asset so no or very limited chance of a takeover to exit. Can only assume their forward pricing for zinc and copper is alot higher than current assumptions. And significant extensions to the high grade underground mine plan and production are being assumed. Given the current market cap there is limited risk reward. Brokers will probably come out with valuations of 10c to 15c or more for HRR using upside assumptions imo. The net result is that the action of the funds backing HRR is far more bullish for better priced, higher leverage peers than HRR.

Side note, the funds backing HRR are known for corporate transactions, its possible further assets could be vended into HRR to increase the current limited appeal.

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DFS is 12+m old. $207m NPV assumed POZ of US$1/lb (now US$1.25/lb) and prepared prior to discovery of G lens extensions. Surely that figure's been well and truly superseded now. Thoughts?

HRR Price at posting: 7.1¢ Sentiment: Hold Disclosure: Held
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What's the future look like for Heron post-raising, page-19

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