Under the radar and undervalued29 Jun 2023 08:20
We calculate what we believe to be an intrinsic value for Red Rock, we will be using a sum-of-the-parts (“SOTP”)
valuation method to combine the different categories, arriving to a final value for the Company. A significant part of
our valuation is the DRC arbitration, which we believe that the market has not priced in.
Project Assets:
Migori Gold Project: £3m
Galaxy Project: £1.9m
Kimono Project: £1m
Faso Minerals: £1m
LacGold Minerals: £1.8m
African Lithium Resources: £1m
Pending IPOs:
New Ballarat Gold Corporation: £3.8m
Elephant and Oil: £0.6m
Other Investments:
El Limon: £0.48m
Other Royalties: £0.6m
This gives Red Rock a value of £15.362m. 🎯
If we factor in the DRC arbitration of $2.505m (£2.19m) and potential $7.5m (£6.41m), we come to a total value of
£17.552m🎯
potentially rising to £23.962m. If we assume that Red Rock will not be awarded the $7.5m but only the
$2.5m, this still gives us an intrinsic value of £17.552m which is significantly higher than the current market 🎯
capitalisation of £4m. 🎯
Using our calculations alongside expected news flow towards the end of the year, we consider Red Rock to be
undervalued and therefore a buy.
Analyst:
Murat Delikara
muratdelikara@clear-cm.co.uk
+44 (0)20 3370 4098