I noticed another gold company, BMA gold has been causing a stir lately. BMO appears to share some similarities to AMG so I thought I'd have a crack at comparing the two since BMO could be an indicator of how the market will value AMG in the short-term post raising.
So, assume AMG will issue 420m shares at $.0285 each, which combined with the expected 200m shares issue will give a post raising market cap of $17.67m.
From its last quarterly BMO had 10m in cash, and a market cap of 32.34m, giving it a real market value of some $22.34m at today's closing price.
Now the similarities: They've both got around 450k oz of high grade epithermal gold which they intend to mine as an underground operation. Potential to add to that remains fairly good for both companies.
BMO has given a total of $22m for development of the mine, while AMG has indicated a similar figure for developing Tuvatu.
AMG would appear to have a labour costs advantage, with it being in Fiji while BMO is in Queensland, while BMO would have a sovereign risk edge over AMG.
Two major differences between the two, though, is BMO's resource grades at 13.9g/t while AMG's is only 8.5g/ and BMO has already begun mine construction.
I'm unsure how to exactly value the two but given the two cases above it would appear at first glance that BMO would be better value, with AMG at a 20% discount to BMO yet being a year away from mine construction and having lower gold grades. Assuming BMO is fairly priced by the market, it could also possibly mean AMG's share price won't be heading north in a hurry.
Of course the two situations are far more complex and assessing both accurately are beyond the scope of my (a layman) skills.
But I'd be interested in other's views. ( especially those who actually know what they're talking about!! )
AMG Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
