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We dont know what form of deal will be struck, but the RNS refers to potential JV, FO, or sale, rather than off take.
Valuing a pre-revenue miner isn't an exact science. Sometimes, the easiest way is to compare apples to AIM-oranges. One of the closest companies and deposits I could find was Phoenix Copper (PXC) & the Empire mine.
Mining-friendly jurisdiction like Kazak, similar sized polymetalic deposit, both open-pit & underground but PXC are a couple years ahead. Empire mine has an M&I + Inferred resource ~33mt @ 0.75% CuEq (majority M&I, of which Cu is 0.39%) for around 250kt of contained copper equiv. Not as much confidence in our deposit due to wider hole distribution but 20.3mt @1.57% CuEq inferred gives us around 320kt of contained copper equiv. They've been on a small run recently but are currently valued at £26m. Considering we have a likely off-take (in some form) in the offing, I think we're only 12months behind them (if that). Given our profile and their valuation, I definitely think £20m m/c isn't impossible within the next 3-6months given expected newsflow (Farmout talks concluding, BHP poprphyr decision, VMS drilling campaign, sedimentary-hosted copper exploration activity etc.).
Q3, should say.
Ofvtheres one small pre revenue miner where you dont have to worry about dilution, its this one.
Fo by q2 sees to that.
Possibly. It should have moved higher
Massive dilution coming here HappyD. Price stuck at 3p for ages and will probably drift lower - best avoided for a while.
Good point, so a clean single asset is preferable
Most mid/large producers do not want the hassle of dealing with non-core licenses for a host of reasons. Risks of litigation due to issues unrelated to the asset of interest, added exploration budgeting towards non-core interests (prev. signed binding agreements), non-core metals (bring up ESG issues) etc.. They don't have time deal with that cr*p. I think it will be a clean transaction solely for Verkhuba.
If you rerun the pit optimisation analysis on the open pit part only with the new data in the JORC, the haircut between NPV and current value has got even wider, no wonder buyers/partners are circling. To get a clearer picture, you'd have to be in the data room.
Nice work by the CEO and pathway to i) permitting and production can be set out and/or ii) additional drilling to move to indicated. Those would reduce the haircut and have a rather nice sp impact (all my calcs are for fully diluted). Easy hold at this stage.
You then think, wouldn't it be easier for a buyer to bid for the whole of EST? I'm only half joking, if a bidder called him and gave him an informal bid number, think of the sp level needed to even carry on that conversation
This appears very similar to EUA back in the day , huge potential resources in the ground worth billions and potential for a sale or JV.
Alex seems a lot more switched on and hopefully there are no aggressive actions in region which put an end to EUAs dreams of a sale.
Glad to be holding here and let's see how this turns out
5%!!! No point in trying to keep the lid on it....
What would Alex take for a full sale...needs to be a very tempting offer.
Correction 5% of 3 billion is 150 million.
Equates to around 60p per share.
Time for my pills!
If we assume that we discount the value in the ground by at least 95% to allow for all the costs involved in getting to selling the stuff, that still values EST (just Verkhuba) at £300m.
Present valuation of EST is c£8.7 m
Any thoughts?
236k T of copper @ $10000= $2.36B
313k T of zinc @ say $2500= $782m
Total say $3B plus a bit of lead..
Of course, this is still in the ground and is valued much, much, lower by orders of magnitude, plus even that top line market value needs discounting for both time and cost. Our friends in the data room will be busy with their spreadsheets modelling this, which is beyond my capabilities; but I suggest the value of EST even at this early stage must easilt justify AW's assertion that "the value of Verkhuba alone significantly exceeds the current market capitalisation of the Company", reaffirmed when the SP was pushing 3p.
I would expect the SP and Mcap, still only £8.5M, to trend higher once this news gets digested. Not that i know anything, mind, so dyor, etc, etc....
Iptuf93..... are you saying 318,000 tons of copper? Is it me being thick, thought copper was at nearly $10,000 per ton
But my calculation seems astronomical!
Given Alex has completely smashed it out the park and delivered a JORC resource on the Open Pit as well as the Underground, lets revisit valuations. Again, this is an ultra-conservative figure but used globally in valuing in-ground inferred resources.
20.3mt @ 1.57% CuEq equates to 318,000t of equivalent Copper - roughly 700m lbs of Copper. At 4c/lb, thats $28m USD which at todays exchange rate is £22.65m. At 218m shares, that's a valuation of 10.39p.
Given we have plenty of capacity and infrastructure nearby as well as being in advanced farm out/take off agreement/sale talks, I'd add a considerable premium to that figure...
More good news and another healthy rise before breakfast 🌞🌼
No placings coming
Cash from jv offer will take this deposit to mine free carry imo
It’s less than 2 years off that to get it out of the ground.
Jv and this multi bags
I know it’s not the right way to look at things, but we have a JORC copper resource of c.$2.4bn vs a MCAP of $10m!
This CEO does what he says he's going to do. Very rare for companies this size.
6m market cap currently.
How much could we sell the copper project for "within months"
Solid progress
Nice statement
This is a significant milestone. In a little over a year and one exploration season, we have transformed a historical copper deposit into a large JORC Inferred Mineral Resource in an infrastructure-rich region. Our Company is now underpinned not only by its highly prospective exploration licences but by a significant critical metal asset in the ground.
"At over 20Mt, Verkhuba is in the top third of this style of VMS deposit globally. With copper at close to $10,000 per tonne and the prospect of a low capex, open pit development, we believe the Deposit to be of considerable value. In the context of East Star's current market capitalisation, and upside from other regional VMS targets and copper porphyry exploration supported by BHP Xplor, East Star is in a very good position to create further shareholder value in 2024."