Australia's largest stock trading and investment forum Australia's #1 stock forum

G1A

Click for more information

0.00%

5.9¢ galena mining limited

" just a humble mining engineer blabbing on about a stock in a...

First 34 Last

Share
Profile

Follow
plough

33,686 Posts.

1786

25/06/21

14:33

Post #: 54073826
Share

Originally posted by Blue_bull ↑

Without any hitches? A lot of ifs*:

If the prices stays where they are
If they execute on time and on budget
If the dilution is a minimal as suggested
If the recoveries match the testwork
If they manage to keep on track with the costs
If the concentrate shipping costs and TC/RC's are reasonable and per the assumptions made

(*Im not being negative here, this is mining and most mining projects have at least a few issues. Its a good ore body that should technically perform under an experienced team based on the info provided DDOYD).

So if all of the above, then the MBA's would tell us the valuation should equal the NPV of AUD381 post tax. The 15% & 23% drop in Pb and Ag grades are (today) more than balanced out by a 7% and 75% higher Pb and Ag price against what was used in the 2019 FS.

By that argument the price would be up 231% up to 0.90. I am assuming the same NPV even though it should be a bit higher on the higher price assumptions and lower grade assumptions. But then again, this reasoning has already been baked in and we see the price is not flying up on the back of this news because we aren't there yet. Its gone up nicely, no doubt, but there are a lot of folks who are still unsure if they can execute, + the sad fact that this is and always will be a depleting asset, so it needs more blue sky to really rocket. The only blue sky is now the copper that has been announced, but I would not consider this in any assessment. They are building a Pb mine and need to keep the eye on that ball. As an operator I would nevertheless be excited about this and looking to see if I could somehow include it in the BP so long as it does not distract. As an operator I would also always under promise and over deliver, this way dealing with the curve balls anyone in this industry always gets on any mine. There are just so many variables to manage and this is why few actually get it right. Hopefully this is the case with Galena's management & the whole FS, all seems okayish so far.

So the share price is where it is now, and I would say that if all goes well the price would be at least above 0.45 once in production to be reasonably conservative. Would you be okay with that return? If so then the hard part is choosing when to sell with possible upside or disaster still to come....

Now if the company were to finally announce a production net revenue of AUD100M+ in the first year or two of commercial production the valuation could easily be closer to a dollar. But hey that's my opinion, just a humble mining engineer blabbing on about a stock in a market he knows little about, and we are still a very long 24 months away from production. Hence a good idea would be to check how the team did elsewhere before and get their sense on it by talking to them. Afterall, 85% of it is about the team.

I'm not a buyer, today...yet - I want to do a bit more DD first.

Expand

" just a humble mining engineer blabbing on about a stock in a market he knows little about, "

a dead cert that you would know more about if this will fly than anyone else on this chat site though so looking forward to your ""DD" results on here .
I bought some today after doing well selling this 18 months ago, to get into another Pb developer BML which was more undervalued than this at the time . There were obvious more issues with this being UG than an open cut but it looks like they have sorted most of that out

G1A Price at posting: 22.5¢ Sentiment: Hold Disclosure: Not Held
2 Upvote

0 Great analysis

Reply

Top Stories

MGU

New results confirm Buena Vista's iron grades potential

MRC

Mineral Commodities to shut down Tormin mineral sands project as oil spill contaminates beach

Trimmed CPI figure provokes market jump of 1%, but inflation pressures remain a reality

1CG

One Click Group jumps 4% after ending quarter with $2.4M in cash; $1M in revenue and 150K+ users on board

KOB

Koba, formerly a cobalt player, gears up to become newest explorer in the uranium state: South Australia

There are more pages in this discussion • 1 more message in this thread...

First 34 Last

Add G1A (ASX) to my watchlist