Not really in Australia. We don't have too many platinum exploration companies in Oz - the hunting has been generally poor and the landings hard from re-doing Munni Munni, Panton, etc a hundred times to no success. So it is interesting to see an Australian company doing so well in Canada.
For a comparison; PLA has a mine under construction (Smokey Hills), with total resources of 5.5Mt @ 5g/t 4E PGE's for 1MOz, plus Panton (2MOz) and Kalplats (0.5MOz) for 3.5 MOz PGE's and is capped at $500M approx - roughly $150/Oz of contained PGE.
SLV has a tails retreatment operation; it produces 10KOz PGE's and a bit of chromite and is valued at $480/Oz PGE on current market capitalisation.
Both of these are Bushveld operations and, as such, at risk from the South African power crisis for the next 3 to 5 years. In particular, one would say that SLV is perhaps a bit expensive on longer-term PGE prices, and PLA has a little to go to reach its full potential given its cash costs are fairly low.
What it means for Magma, which is capitalised at AUD$28M and wih otential for >1MOz of PGE's lus Ni-Cu credits, is that if we go to a capitalisation of $150/Oz our market cap could go up five-fold. In production, if $450/Oz capitalisation is the rule, then a market cap of $450M. But I'd say not this high.
The better example to compare with is Nkwe Platinum, capped at ~$174M and capitalised to $2.48 per resource ounce (MMB = $2.32). Nkwe is a Bushveld explorer, so it's more equally comparable with MMB, but as you can see the difference between $2.48 and $2.32 isn't much - 5%. However, I think that its not quite so simple either; Nkwe is involved with Black Economic Empowerment, in an increasingly unstable part of the world, and could be discounted severely by the power crisis in South Africa.
Magma, lacking these negatives and risks, could in my opinion, go beyond the $2.50/Oz level on a 1MOz resource. I also think that, a few years further out, we could see a much easier route through a scoping and construction phase for Magma, due to the easier tenure and jurisdictional issues involved with exploration in Canada.
Either way you cut it, a resource announcement will lift this company substantially, and for good reasons.
MMB Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
