121 Mining Investment London 2018, page-86

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02/07/18

19:16

Post #: 34091838
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Originally posted by wilfran1pm ↑

In my spare time I am still searching for some info on-line re how to develop a valuation model for spec mining stocks like OGX. I came across the following Canadian web site provided by Kaiser Research Online.

https://secure.kaiserresearch.com/s...e=KRO-Profile&_Title=Orinoco-Gold-Ltd-OGX-ASX

An “Orinoco Project Valuations” diagram is provided in their published “free stuff”. It is copyrighted so I haven’t provided a copy here. It is an “Implied Project Value vs Project Stage” diagram generated using their “Rational Speculation Model”. I suggest anyone interested should go to their site and have a look.

Their current valuation for the OGX Faina Goldfields Projects is CAD$105 million (which is close enough to the same number in AUS$’s).

So the equivalent SP based on the current Faini Project Life Cycle Stage would be about 10c per share (using full diluted issued capital). Pretty close to the current price. Looks like the SP ran ahead of its current spec valuation and then overcorrected back to the current level.

What is somewhat exciting is that their model suggests that if the project follows through into Production as per its current progress suggests, then the Outcome Target Valuation is CAD$2 Billion which equates to an SP around 192c.

Note that their model doesn’t include the recent Cobalt find. Not sure how accurate their model is or how these speculative estimated future values compare to our OGX SFA guru estimates, as they are reluctant to post them. But this is the only SFA stuff that I’ve found on OGX so it would be nice to get the views of our SFA gurus.

Am I being misled by these SFA estimates or are they close to the mark. They certainly seem to be consistent with the Mining Investment Presentation. Anyone care to comment?

Wilf

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I'm here because 1. Anglo doesn't play with sprats like us unless they're fairly sure we have 5 million+ ozs, which is why they want JVs on every OGX project. It could be 10 million+ ozs. 2. OGX is clearly sitting on fields of high-grade gold. Silver, cobalt, nickel too.
3. It's 7¢

OGX Price at posting: 6.9¢ Sentiment: Buy Disclosure: Held
29 Upvote

4 Great analysis

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