Charting, page-6

@philw

Thanks for sharing your analysis.

"But does the above comparison justify such a large premium in market capitalisation for ADT & SVL compared to MMA? ADT has a market cap 25x MMA's and SVL 6.5x MMA's market cap."

In comparing ADT to MMA you are not comparing the same things. ADT is 78% of the way through building their project! By my very crude analysis they are somewhere around up 10% on the stated cost for capex but within the contingency. The current silver price is down about 10% from the price assumed in the DFS but the AUD/USD is also down about 10% too (which offsets). We can assume that opex prices will be higher than the base case of the DFS too but I suspect they have enough funding in place to sustain start-up.

I don't follow ADT closely at the moment. I did hold for some time but sold because I was nervous about trouble in the Slavic world on the back of Russia's recent invasion into Ukraine (I just wish I got back in when the price corrected but ). Anyway, I just did some very crude adjustments to the published NPV for Vares taking into account the factors I stated above and ADT's market cap is probably somewhere around maybe 60-66% of my adjusted NPV. Is that justified? Probably. Why isn't it 75%? It would be a bargain if it was trading at 50% for where the project is at.

But that's the thing. ADT's Vares project is permitted, funded and 78% constructed! A completely different story to where MMA is at. At the end of the March Quarter MMA hadd $8.4M in the bank. How long will that sustain exploration for? How much more time and money is it going to take to get MMA through exploration to the same stage that ADT is at? How much of the resource will they be able to convert to indicated and measured to be able to include in a PFS? What will be the project economics? When will there be a DFS? Permitting? Financing? What are all the hurdles, uncertainties and risks that are now behind ADT that are ahead for MMA? How much further dillution will be required to get MMA to a fully funded project? Then operational, then profitable? How many years down the track will that be?