Hi All, just tracking the good valuations others have posted here, based on the Morila Superpit Gold resource and Goulima Lithium Project:
First up, from
dgdgdm"Hi All,
Completed a quick NPV calc to estimate the intrinsic value of FFX shares based on Morila alone. My views only - please DYOR.
Outcome - it shows that if FFX can continue to execute, ie. prove up reserves and increase to 200 kOz/annum run rate as planned, we shouldconservativelybe worth at least 5 bags+ ($1.32 SP+) based on MORILA ONLY.
This is analysis is consideredconservativeas it assumes;
- Zero value for Goulamina ($A 1.2M post-tax NPV) in current SP
- Zero value for CIL 4.5 MTPA plant and associated infrastructure (worth $US 350M to replicate)
- Zero FCF generated this year (despite currently being cash-flow positive on tailings-only operations)
- Fixed gold price at $US 1800/oz (no gold price upside)
- Conservative long term average all-in costs of $US 850/oz (ie. 60% margin on cash costs provided from 09/02/21 ASX ann, this margin equates to >$60M USD/annum for G&A, exploration, sustaining & non-sustaining CAPEX which is very high for an established open pit gold mine).
- Fixed $A 75M loan facility (equivalent to total forecast CAPEX from 09/02/21 ASX ann) @ 12% interest to cover other future capex/opportunities
- No future increase in 4.5MTPA plant capacity (unused sag mill anyone?) which would increase 200kOz/annum run rate
- No identification of other high grade zones or Morila 2.0 which would increase 200 kOz/annum run rate
- Closure of mine after 3Moz gold produced (hence terminal value of 6) - excludes the huge Morila geological upside, 10+ years of upcoming drilling and tolling opportunities from nearby exploration projects.
- No consideration of existing tax credits nor future depreciation & amortisation tax credits
- No further gold mine acquisitions from >$A 125M/annum free cash flows
What's more scary is that with a current EV of $A 180M and forecasted 80% EBITDA of $A 195M if we can execute, which Alistair and the team will, our hypotheticalforward EV/EBITDA would be <1at our current SP which is just not plausible. RSG in Mali for example currently have a EV/EBITDA of 4 at their current SP, whichfurther emphasises there's at least 4-5 bags on the table here for FFX.
FFX is a billion dollar company in the making, even without Goulamina.
Disclaimer: my views only - please DYOR.
dgdgdm.
![https://hotcopper.com.au/data/attachments/2910/2910434-c259a3398ebaf04f8bdbdbf625cfb8a5.jpg](https://hotcopper.com.au/data/attachments/2910/2910434-c259a3398ebaf04f8bdbdbf625cfb8a5.jpg)
"
And then this chestnut on the FFX resource from
Gusty (hope I got that right), with a an NPV of $1.5Bn for the Lithium asset.
![https://hotcopper.com.au/data/attachments/2912/2912838-84136e35ec6cf31269c3acda8c5a2b85.jpg](https://hotcopper.com.au/data/attachments/2912/2912838-84136e35ec6cf31269c3acda8c5a2b85.jpg)
Given the shrewdness of management, and their ability to squeeze maximum value out of their positions:
we are currently looking at an NPV for FFX of $2.627 BILLION AUD and a current MC of $207.2M AUD.
The SP based on the above SHOULD be in the order of 12.6 times the current, namely: $3.29 AU.This is only the beginning! And with the gold pouring, we have the cashflow to move and manoeuvre the company as we please!
IMO, the catalyst for the MASSIVE re-rate that needs to occur will be the pending announcements, and so get ready and increase your position as we move closer to that news coming out this week!
GLTAH.
![biggrin.png](https://hotcopper.com.au/images/smilies/biggrin.png)
![biggrin.png](https://hotcopper.com.au/images/smilies/biggrin.png)
This is the week the FIREFINCH rises!!