Another means of valuation would be via a comparison with a peer that is more down the line than us with a view to where our cap might be when we're at a similar stage to them.
For example, look at PNA, producing 65koz CuEq per annum looking to move towards 100-120koz per annum in the medium-term. Grade is fairly low and is mainly based in Laos, also expansion in Chile & Thailand. Production has had its difficulties but now seems to have stabilised and confidence has come into the stock. Cap is about $2.5B.
EXS has higher grade Cu, lower sovereign risk (Rudd notwithstanding) looking for 25Koz per annum which may take place in mid-2011 or mid-2012 depending on prod'n option. Expansion to occur, one hopes, from the other copper assets they are currently drilling, lets say they expand to look to reach 50Koz in the medium-term. Opex sound reasonable etc. So, we might say, if prod'n goes smoothly (and EXS manaagement has currently proved capable) then by 2013 say, with stable prod'n EXS would be a state of being at 2/5ths the level of PNA ie a $1B company, which equates to $3 at current share issue levels.
Obviously this is a very rough calculation dependent on funding issues, dilution, exploration, expansion, market buoyancy etc but boxes have been well ticked with this campany and, ceteris parabus, I can see this as a long-term hold if you're an investor.
Short-term, dunno, but the release of the CCP plans, if positive, will provide some certainty that can only help the share price.
EXS Price at posting:
57.0¢ Sentiment: LT Buy Disclosure: Held
