Quiz, my knee-jerk reaction to your post was that Genuity must have modifed their tonnage projection up to 6.0 million.
I had assumed this because again, at their base case 4.0 Mt they gave a share price of $3.52 and for their 8.0 Mt scenario, they gave a share price of $7.96.
$5.50 is in between $3.52-$7.96 (roughly) and 6.0 Mt is in between 4.0 - 8.0.
But, my knee-jerk reaction was wrong. Genuity's previous target was $4.50. (this represented a 28% premium on the $3.52 target). Therefore, one would have to assume that their new target of $5.50 has a similar premium and net of this premium, the price would be approximately $4.30.
Spinning a few numbers, with everything else being equal, I suspect that their base case is now 4.75 Mt.
It should also be noted that Genuity is being fairly conservative in the valuation as they have used the following in their valuation model:
7% in-situ
$2.00/lb CU
$8.00/lb NI
$1500.00/oz PT
JV Land Value of $0.30/share (vs. $1.36)
Cash/Warrants & Options $0.42/share (vs $0.47)
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As Genuity has more expertise and resources at their disposl for tonnage calculations than the majority of us here, I personaly am making the assumption that their model of 4.75 Mt for DE1 will prove to be fairly accurate. I have also updated my weighted average metal content spreadsheet to include the assays released yesterday. With the addition of yesterday's assays, our NI equivalent content dropped from 3.1% to 2.92%. So, using this information here is what I feel our current valuation should be without any intangibles (ie. Blue Sky, Johnny & June turning on other targets etc).
NI Equilalent |
2.92% |
|
|
NI Price / LB. |
$ 10.00 |
|
|
F/D Shares |
134500000 |
|
|
Other Properties |
$ 1.00 |
|
|
|
|
Tonnes Ore |
4750000 |
|
|
Buy-out Value |
10.0% |
|
|
Gross Metal Value |
3051400000 |
|
|
Share Price |
$ 2.27 |
|
|
Goodwill |
$ 1.49 |
|
|
JV Land VALUE |
$ 1.36 |
|
|
Cash & Warrants |
$ 0.47 |
|
|
Other Properties |
$ 1.00 |
|
|
S/P Should be |
$ 6.59 |
As this post is little lengthy, I am going to post a subsequent post with valuation to include a "Hit" at DE2.
Cheers,
Milsy1