Possible takeover, page-14

I think the only way you can say it is fully valued if applying a discount for no quarterly production numbers.

If you take the feasibility study and compare it to someone like SAR (which in my opinion has similar quality assets, margins, reserves/mine life) then SAR current EV around A$1.7B for 315koz of annual production. SAR valuation A$5,400 per oz of annual production.

Same measure for DCN at A$3,600 per oz of annual production using a conservative 180koz/year and EV A$650M. SAR gets a bit of a diversification benefit in the valuation but shouldn't be 50% higher in my book, particularly given the pedigree of DCN management and exploration upside.

I think that while the mid-cap producers keep saying the developers are expensive they will eventually have to take them out. It's all very well picking up satellite ground and very early juniors but in many cases those ounces are years away (if at all). Whatever happened to Tanami and NST?

It's like the articles I posted about SBM from the AFR. SBM want 250koz per year, in good jurisdiction, A$1000 AISC and 10 year mine life. This is unicorn stuff for the most part. They are still living in gold environment from 4 years ago. The asset quality of something like Mt Morgans is the new normal, particularly in Australia.

So it's a waiting game, SBM/SAR/NST either take a bit of risk and buy a developer before the market attaches premium valuation to the asset, or they risk having some poor production quarters from aging assets and having their stock marked down significantly from current fairly lofty levels. SBM for example is very exposed to Gwalia and it is a technically complex operation (which the market is forgetting now).