28.7p Target7 Jul 2021 08:48
The Hoards of Mongolia -We have looked at the valuation of the operations through a standard RENAV (Risked Exploration Net Asset Value) derived from discounted cash flow. Using a flat Brent oil price of US55/bbl, we believe that the base Heron development could be worth approximately 9.3 p/share. We have assumed a 50% chance of the company being able to increase Heron’s reserves up to the target level which would add a further 9.4 p/share to the valuation. The risked exploration would then add a further 10.1 p/share to this value. This gives an overall RENAV of 28.7p/share. Investors should view any valuation in the context of their own assessments of the relevant risks.