Shares on issue = 413 million
Cash = 3.4 million as per last quarterly ( deduct 300-400k on admin costs)
MArket cap = 19 million
Top 4 holders holding = 30% (approx) including Mining Institutions
Few very important facts:
1: BFS complete for +220,000 ounces of gold for US$387 per ounce (a stand out)
2: MSR included in Kyrgyz Republic GDP 2014/2015 Budget... Supported greatly by the government in the past.
3. Surrounded by Kumtor - 17Mozs, Taldybulak - 5Mozs- Andash - 1.1MOzs, Jerooy - 4Mozs and Chaarat - 4Mozs.
4. Net cash flow US$148M after capital, taxes and royalties (excluding financing costs which are around US$40-45 million) from the production of 227,000oz of gold over a 4 and half year mine life at US$1400 gold price. This means required finance will be paid within a year of production even at $1000.00 gold price.
5. This is an internal rate of return of 67% at an 8% discount rate.
6. Low cost vat leach and jeap leach operation with projected 84.8% overall gold recovery including +90% gold recovery for oxide material.
7. 1.18Mozs total resource - across Shambesai and Obdilla
8. Environmental Impact Assessment rocess completed and project OVOS completed.
Why I think it's a buy? The managment of the company has been in discussions with few interested parties both financial institutions and Chinese and Russian investors who have already invested in the area. Managemet has said that deal would be at a better price than sp which they believe is exteremly low. Stephen Ross - MD has been in China quite a few times in last couple of months. As per my calculations deal is not far a head. If a finance deal is done, MSR may have a dream run.
The selling side looks extremely thin with very few interested to sell. Share price has gained few ticks from mid 3s to mid 4s recently. 4 to 4.5c has major resistance in last few months which seems like lossing itself.... Undervalued investment opportunity which may make some huge gains....
Disclosure: I hold a lot of MSRO (Strike 8c, March 2015).
