Valuation Rationale8 May 2021 19:19
As POW does not have a defined JORC or similar resource statement on any project or
licence, it is not possible to determine a precise valuation for the shares at this stage
of the Group’s development. Nevertheless, such is the scale of projects and licences
within POW, along with the spread of interests in different jurisdictions, over a range
of commodity and precious metal targets, we believe that at least 5 or 6 listed
companies could be formed now from the Group’s holdings.
Each company at the pre-major discovery and resource statement stage could, we
believe, command a market capitalisation of between £7m and £25m given current
resource market conditions, depending upon what recognised stock exchange it is
listed.
On this basis, assuming an average market cap of £16m, and after making a deduction
for other partner interests of 30%, this comes to a value of £67.2m (£16m * 70% *
6). With estimated cash and investments of £3m added, we arrive at a final estimated
equity value of £70.2m at POW’s current pre-resource and major discovery stage,
equating to a price per share of 6.1p per share, and thus our share price target.