"Valuation post reconstruction is 90 cents - $1.20."
I'd approach this valuation cautiously. Even at 80c the company is being valued at some $70m. Personally I believe this is incredible but not withstanding that it would seem even other professionals would agree with that.
Back in January earlier this year ABN Amro valued Tuvatu + exploration at $10m in a research report on Emperor.
When Emperor was under a hostile takeover bid an independent expert was commissioned by EMP. In a report that has been argued as fairly optimistic by DRD, and one which valued EMP at some 50% above the market price at the time, Deloitte gave a valuation of Tuvatu + exploration potential of around $12m.
I can see how one could disregard a broker report but the independent expert was fairly thorough in its investigation and had no reason to be biased. That it could be out by a factor of 5 is hard to believe.
In absolute terms 70m would look very high - but then comparatively it fares no better by the looks of things. There are other well managed, Australian based, 100k+ oz pa operations with resources of 1mil + (specifically - LVR) out there valued at around the same amount. AMG will face infrastructure problems, soverign risks, and is only a 60k oz pa with a 450k oz resource.
Frankly I think AMG has excellent prospects but I simply cannot see it being worth, already, now, 5 times more than what the market thinks it is worth. At best the market thinks AMG got a fair deal, at worst, they've been shortchanged. Work and time will be needed to change this perception - it may take months or years, but I don't think it will happen suddenly.
Then again all are my own opinions on this, and I've relied mainly on google searches etc for my information - to give you some idea of how much of an expert at this I am, lol.
AMG Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
