Webinar - My conclusions - Part 22 May 2021 11:21
But the reason I am here, and I know many of the other investors, is for the potential from our other zones around Empire, including Navarre Creek, The Cobalt plays, Horseshoe, Windy Devil, and above all the potential in the deep resources. Focussing on just the last one, in terms of geology, when this area was volcanically active, the seams to the surface are the manifestation of a deeper, larger reservoir below, feeding those lava vents. This is the Copper/Tungsten/Molybdenum Porphyry. But porphyries do tend to be large, indeed very large. A small company would normally have difficulty to finance this, since the costs of drilling deep are very large indeed. For obvious reasons, finance cannot normally be taken for exploration, so this exploration would normally have to come from investors pockets. And that is the reason why so many similar companies fail. They simply run out of money. We are taking a different route. We have an eminently financeable and very profitable open pit mine, which will throw off cash, which will be used on turn to facilitate the exploration work for the deep resources. That should allow this work to be accomplished without the need to call on investors again. As Dennis put it, “The intention is to make this company evolve in a practical, logical, financeable way without getting swallowed up in ambition. We are doing this in a way we can afford.”
And that’s good enough for me. I know the team well, and I like them. I think the new additions last week bring substantial value to the company, and I trust the team. They have their pensions wrapped up in this, and they do not intend to fail. I support them.
Now let me offer my opinion for the share price, for that is ultimately the reason why we are all here, and start with the Analysts, and whose opinions are generally based on the company’s economic model for the Empire open pit mine. They have assigned a value of 64p to 95p (WH Ireland), 60p – 139p (Hardman), and £1.07p (Halgarten). All these are for lower copper prices than we are seeing today, and generally exclude the other opportunities to a greater of lesser extent, and are for pre-start-up. WH Ireland state “the valuation for a company generating on average over $20m/yr (higher in the early years) of post-tax cash flow would be considerably higher”. I point out the obvious that the pay back is now much much higher with present copper.
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