PXC - Best AIM junior miner for risk vs. reward (in my view)17 Oct 2021 11:44
Post from Telegram:
PXC
The Empire Open Pit Mine
Significant increase in economics as we stand due to improved metal prices, most macro analysts are expecting higher prices by when we start production, late NEXT YEAR
Empire mine production isn’t a distant pipe dream in a risky, volatile jurisdiction, it’s in Idaho USA with a supportive local community
The equity side of bringing Empire into production is compete, the Board have stated we are funded into production and into 2023 where we’ll be throwing off significant free cash flows
First year is Copper & Zinc production, PXC’s model is based on $3.6 Ib Copper (now $4.72 lb) & Zinc $1.2 lb (now $1.73):
Based on $3.6 Copper & $1.2 Zinc, year one figures;
$90m net revenue
$56m EBITDA
$43m post tax cash flow year one
(Figures from company presentation)
Copper up 25% & Zinc up 30%
Let’s add 15% being conservative to cover any costs which may have gone up.
$104m Revenue
$65m EBITDA
$50m post tax cash flow year one
(Crude calculation)
Pre production Cap Ex is $52m, so we are at 1 year payback right now!
These figures are for year one only, Empire Open Pit is a ‘starter pit’ to fund exponential growth in other mines & deep sulphides
Remember the recent Empire deep sulphides drilling highlighted the potential for improved Open Pit resource
So the investment case is now;
- £69m market cap
- £8-12m in cash (my estimate)
- $50m free cash flow starting from the end of next year
- Idaho USA, supportive local community
- Multi metal miner, less volatility risk, a range of mines
- Empire mine is only 1% explored
- Cobalt (risk free) JV in-progress with First Colbalt Corp
- Navarre Creek Carlin type Gold resource, drill programme this year
- Red Star Silver mine alone is worth 31p/share at $19oz Silver based on 2020 resource (Hardman & Co)
- ADR programme will only increase demand for shares, incrementally over time
- The Board are proven with good skin in the game
- Top class Institutional Investors like Cannacord are onboard
In my view if you are a commodity bull there is no better risk vs. reward mining play on the UK market
Please do your own research
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