Analyst recommends (July 2014)1 Nov 2014 11:03
(Minco MIO) - BUY
We remain very excited about their Northern Pennine lead/zinc exploration project and await their next drill results with interest.
Approximately £7m, or 50% of the current Minco share capitalisation (£14m) is cash, while their lead & zinc and manganese exploration projects in Canada have value, as does their stake in Mexican silver developer Xtierra (XAG-TSX-V), which has a current market value of around £2m.
Furthermore Minco’s 2% Net Smelter Royalty over Dalradian Resources (DNA-TSX-V) Curraghinalt project in Northern Ireland is potentially worth a lot more than the nominal £0.5m usually given. Dalradian’s 2012 compliant Preliminary Economic Assessment modelled a plus 100,000 ounces per annum gold mine over 15 years. Assuming a US$1,300 per ounce gold price, £1=US$1.65, a 10% discount rate and 20% tax, the Net Present Value of this potential royalty stream is a whopping £12.5m, or almost 90% of Minco’s current market capitalisation.