Valuation19 Sep 2022 08:36
Lots of chat around what would would be fair value/share price once in production. Obviously lots of variables still which we are unable to speculate on (i.e. number of shares in issue/gold price at time of production etc). However, let's go off the situation at present and use Mako and Calibre's market cap at present as a reference as they are both within country and producing.
Mako have a market cap of £87m. They produced 36,000oz in the last 12 months are $1000 AISC. Currently 500tpd but aiming to double to 1000tpd in 2023 which should double production given their high grade stays the same. They have about $7m USD in debt left to pay. They have a smaller overall resource but really high grade.
Calibre have a market cap of £287m. They aim to produce 200,000oz this year (should have been 220-235koz but issue with repairing the mill) with AISC $1250. They have their nevada asset and have a very aggressive drill program and much larger land package across Nic. They have $92m in cash and no debt. They are aiming 250-275k in 2023 and 275-300k in 2024.
Taking Calibre's numbers, at $1700 gold, they are making $90m (200oz x $1700 - AISC $1250). At this price, condor will make $70m. We are making 0.77 OCF (70/90). 0.77 of their market cap is £220m. Now, there are lot of variables here, calibre will have a much higher OCF as their oz increase in 2023 and 2024. They have $92m in cash and no debt. If we take the cash off which equates to £80m, what gives £140m. We would have $60-70m debt to repay plus any potential gold streams which will top slice the companies profits. We have 158m in issue, if you add all the warrants and stock options, that takes us to 196m. With no extra shares placed, that gives us 71p per share. If you add lets say 50m shares, that would take us to 57p.
Lots of upside though. For example, calibre were as high as $1.80CAD this year, currently $1CAD. Their market cap at this years high when gold was around $2000oz was around £500m. 0.77 x £500m gives £385m. Minus their cash on hand gives condor a rough market cap of £300m. So now, if we had 250m shares in issue, our share price would equate to £1.20.
Finally, calibre are very undervalued compared to their peers.
You could say we should be double the value of Mako, given they are only producing 36000oz and similar AISC. That would give a market cap of £174m. We would have more debt to repay. Lets say 250m shares (equity, current number of shares, options and warrants), the sp would be around 70p.
Lots to ponder, lots to unpick. Simple valuations here, lots of variables. Appreciate other people's thoughts and reasoned valuations.
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