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28.5¢ dacian gold limited

Ann: Mt Morgans Gold Operation Exploration Update, page-184

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Greenflint

1,818 Posts.

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29/07/20

18:45

Post #: 46163159
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Originally posted by Greenflint: ↑

An easier comparison is to note that Atlantic valuation of $780mil was based on GP of A$1,800 in May 2019. Its profit margin then was ~$1,000 (it's ASIC is $800/Oz) but now the profit margin is ~$2,000 ($2,700-$800). So the current valuation of Atlantic would be ~$1.6B. If we half Atlantic reserve (1.9Moz) to be 850Koz i.e. to be about the same as DCN, its valuation will be $800mil. Compared that against DCN MC of ~$200mil, you are right in deducing that DCN current valuation is only 1/4 of that of Atlantic and what it should be!!! Hence DCN is dirt cheap. On that basis, DCN valuation should be:

35c *4 = $1.40!!!

I think we all know that no matter how we evaluate DCN, its current value is well too low. Unfortunately it is the market perception, due to the events of the past, that has destroyed its true value. So the only way to correct this perception is time and LJ ability to deliver the results out of DCN potential.

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Sorry I should consider the higher AISC of DCN. The profit margin for DCN should be ~$1,200 (no more hedge) vs Atlantic of $2,000. Hence the value of DCN from this comparison should be:

$1.40*1200/2000= 84c.

84c is about the valuation of the DCF figure of 80c.

DCN Price at posting: 34.0¢ Sentiment: Buy Disclosure: Held
6 Upvote

0 Great analysis

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