Why are you only including open pit ounces in your...

First 20 Last

Share
Profile

Follow
Big Kahuna 101

3,656 Posts.

265

08/03/19

16:08

Post #: 37701758
Share

Originally posted by Coffeebean: ↑

Okay, so I have been trying to cut through the guff today and get my head around the underlying valuation fundamentals. Can someone please scrutinise my high-level logic here;

Total ounces underground = 2,328k
Total ounces in an open pit = 890k
Value in $/ounce fully extracted = $A60 (seems to be the average for takeovers over the past 20 years)
Risk factor for non-completion given stage of process = 20%

Fair market value = 890k x $60 x 80% = $42.7m

Market Cap (once all shares fully issued) = 2.14b x $0.017 = $36.5m

So my conservative estimate post-completion is under valued by $6.2m or $0.002cps (or $0.019).

What I am trying to understand is the difference between the 890k ounces of the open pit, and the 2.328k ounces in the ground. Also, what does any concentration upgrades mean once the DFS is completed? Would that just see my $A60/ounce estimate increase and/or mean my risk discount factor changes?

The other question I have is around the impact of the $A. I would think that on face value that it would hurt any valuations given the cost to extract in $A increases and the immediacy of its impact, but could this potentially be offset by the fact the value of the gold in $A increases higher as a proportion?

Expand

Why are you only including open pit ounces in your valuation?

Your also missing the $8.5 mil of debt so based on you scenario its prob fair value.

VEC Price at posting: 1.7¢ Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

MIN

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

ASX Market Close: ASX closes above 8,400pts on green Wednesday | Nov 27, 2024

WC8

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

ACW

This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game

There are more pages in this discussion • 21 more messages in this thread...

First 20 Last

Add VEC (ASX) to my watchlist

Why are you only including open pit ounces in your...

Top Stories

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

ASX Market Close: ASX closes above 8,400pts on green Wednesday | Nov 27, 2024

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game