Superior Gold Inc (SGI)
- Newly formed company led by Chris Bradbrook
- Ex CEO of New Gold and founder of Crocodile Gold
- Latest video presentation can be found HERE.
- Total land package: 644 Km2 in Western Australia (tier 1 jurisdiction)
- Flagship asset: The Plutonic Mine, acquired from Northern Star last year.
- Located in Australia
- Over 5Moz of past production
- Currently producing 80Toz (capacity for 150-200Toz already in place)
- Aiming for 100Toz/year of production starting next year
- CEO Expecting 30M of free cash flow next year.
- ~2Moz Au (Reserves, M&I, inferred)
- Recent exploration highlights:
- 2.2m @ 64.0gpt
- 3.8m @ 25.3gpt
- 1.5m @ 41.5gpt
- 4.6m @ 19.7gpt
- Noteworthy shareholders :
- 19.2% Northern Star
- 13.5% Sentry Investments
- 8.7% Board and management
- 8.7% Sprott
- Fully diluted market cap: US$89 M
- Cash and eqv.: ~US$30 M
- Enterprise Value: ~US$59 M
- Catalysts: Production ramp up (80Toz -> 100Toz, 100Toz -> 165Toz?), reserve expansion, maintaining performance and exploration success.
- Comment: EV of US$59 M for a soon (hopefully) to be 100Toz/year producer with expected FCF of $30 M next year. Cheap based on EV/Resource, EV/Production and especially EV/forecasted FCF. High risk / high reward play. If they are successful in extending the mine life by turning resources into reserves on top of reigning in costs, this could very well be a multi bagger. High beta play with company specific execution risks. Pretty unknown and underfollowed company IMHO (Which I like).
- NPV example:
- 80Toz year 1, 100Toz year 2-8
- 0.88Moz total production over 8 years
- Gold price: $1300 (over all years)
- AISC: US$1050 (Higher than quarter avg since takeover)
- Discount rate: 7% (Bear in mind that most south american and african developers use 5%)
- Accumulated free cash flow: US$165 M
- NPV of free cash flow (7% Disc. Rate): US$135 M (vs. company EV of US$59 M)
Investment thesis can be read HERE.
Increased stakes in:
AbraPlata Resources Corp (ABRA)
- Fully diluted market cap: US$15 M
- Flagship project: Diablillos (Silver/Gold)
- Resources: ~2Moz AuEQ or ~155Moz AgEQ
- Price/AgEQ Resource: 0.09 (way lower than any other name I follow)
- Multiple Cu-Au-(Mo) porphery exploration properties/targets: Cerro Viejo, Cerro Amarillo, Samenta
- Exploration success (currently drilling)
- PEA expected this fall
- Noteworthy shareholders:
- 19.9% SSR Mining
- 12.3% Management
- Comment: High risk / high reward optionality play. I am holding this for $25+ silver as with basically every other silver developer. Exploration success in any of their other high impact porphery targets could change the story in a heart beat.
Impact Silver Corp (IPT)
- Fully diluted market cap: US$25 M
- Cash: ~US$5.5 M (Q2)
- Enterprise value: ~US$19.5 M
- AgEQ production: 0.95Moz
- EV/AgEQ production: 20.5 (Compare with other producers HERE)
- Comment: Turbo charged silver beta with exploration and production upside down the road. High risk / high reward play.
Otis Gold Corp (OOO)
- Fully diluted market cap: US$42 M
- Comment: Expecting a lot from this company before years end. Insiders have been loading up all year.
- Fully diluted market cap: US$5 M
- Comment: One of the best R/R plays I know ATM. If this story even gets a whiff of success, I can easily see it outperform my other holdings. HIGH RISK. Currently waiting for drill assays.
Final note: Also added som shares in Novo Resources at CAD$5.80 today.
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