@plough I take that back about OBM looking overvalued. Just been having a closer look at over their plans. Their Sandking UG prospect looks like it will definitely be a second production front. This should push head grade to about 4gt. Their plant has a 1.2mpta nameplate. They'll probably need to reduce that slightly to deal with the harder ore blend. 1.1mtpa * 4gt = 130k oz at 92% recovery rate. 130k * $1,700 margin = 220 million OPCF Current EV approximately 665 million. OBM EV/OPCF = 3 SPR EV/OPCF = 2.6 BGL EV/OPCF = 5.75
SPR still looks the best value of the three using a back of the envelope estimated operating cashflow as the yard stick although OBM is looking like a pretty good buy if they can ramp up to 2 UG production fronts.
SPR Price at posting:
83.0¢ Sentiment: Buy Disclosure: Held
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