DYOR. Analysis is highly-speculative. You must do your own research and analysis. Do not treat as advice.
Seek independent professional advice and make your own investing decisions.
Plugging some numbers into my earlier DCF analysis I think there are scenarios where this could
conservatively achieve a post-tax NPV AUD $437M post-tax for NVA's share.
I have used the following assumptions:
- 3 Moz indicated resource forming the basis of a future reserve ( this will grow before production )
- 5.5% mining dilution gives total ounces mined 2.84 Moz
- Steady state-production averaging 150 koz for 15 years Life of Mine
- USD $1650 gold price ( current gold price is USD $1800 ), so my numbers use 9.2% below the current gold price.
- AISC at USD $1050 based on the Probe Metals PEA (we need to wait for Scoping Study to get a better handle on potential AISC)
- 79.3% processing recoveries giving production ounces 2.25 Moz over life of mine from the indicated resource
- CAPEX I have derived from capital intensity of the Probe Metals project but at peak production in my model of 195 koz
- Depreciation & Amortisation at 7% of EBITDA
- Assumption is that production gold production royalties and toll fees for use of a future road will be factored into AISC
The
estimate below is so conservative that the implied P/E is just 6.0 derived from post-tax NPV divided by average NPAT. GOR is trading at a P/E of 17.59, EVN at 19.0, WGX at 10.71. The market cap of GOR ( AUD $1.35B ) is an indication of potential trading range once a deposit producing 150,000+ koz pa could potentially be trading at. So about 5-6x upside in market cap ...
Average production in first 5 years in my model is 172 koz pa.
View attachment 3927437Some interesting things:
- Depth of overburden ranges from 0-22m and averages just 7m. This together with the shape of the ore body should help in achieving a low strip ratio.
- Oblique and long sections show that a low strip ratio, I think conservatively around 1:1 waste to ore could potentially be achievable for a starter pit which will be in the middle of the deposit.
View attachment 3927389View attachment 3927383
(20min delay)