Hi peeps, just thought I'd chime in on the valuation of the...

Hi peeps, just thought I'd chime in on the valuation of the company.
When the market wakes up, this is bound to really take off.

I assume we are where we are at due to mainly the uncertainty on how the plant would have been funded to get it up and running.
However looks like we already have that covered now, don't forget there is a lot of options @ 0.02 which will bring in substantial cash to the company if converted.

I estimate cash to be around $1.4 million + $1 million raise + ~$600k in bank = $3 million or $1.6 million assuming no options are converted at all.
pretty solid position I would say.

There are two methods to look at, both giving a close valuation/market cap.
1) market cap / ounces of gold or silver.
2) cashflow multiple - most straight forward.

Now considering we have everything else in place, such as a good board, tight share holdings, etc, we will skip that part.
I am also measuring this with NOVO Resources Corporation which is listed on the TSX but the assets are in the Pilbara.
Ignoring the exchange rate as well as CAD/AUD is almost 1 to 1.
There are other companies but decided to use NOVO.

1) market cap / oz method
Novo - $660,000,000 / 903,000 oz of gold. = $730 per oz
JDR (gold) - $21,500,000 / 265,000 oz gold = $81 per oz
JDR (silver) - $21,500,000 / (20,000,000 oz silver / 70) = $75
* Decided to use the current gold/silver ratio of 70 though it should really be around 50.

Now if we take $730per oz as what Novo is trading at for gold then JDR = 265k x $730 = $193,450,000 market cap.
If we base it on Silver - $730/ 70 = $10/oz, then JDR = 20,000,000 x $10 = $200,000,000 market cap.

Many may argue it is not a correct way to value a company, as it is too risky, etc. but look at every other gold stock!
which then would bring us to our next valuation method, which is based on actual production and cash flows.

2) cashflow method
Lets use the cashflow method, seeing there is already a plant and we have working capital to move forward.
As a general rule of thumb valuations range between 5-10x cash flow.
Novo trades around 9x expected cashflow, based on the plant, which is expected to be producing in 2021 only.
Assuming 100k oz of production based on their 1.5MTPA plant and AISC of ~$1,300 apparently.

Novo - 100,000 oz x ($2,050 - $1,300 cost) = $75,000,000 cash flow or;
$660,000,000 market cap / 95,000,000 = 9x cash flow.

since Jadar does not have a gold production plant yet, we shall use silver instead.
JDR - 1,200,000 oz Silver x ($28 - $10) = $21,600,000 or if based on 9x cash flow $195 million market cap!
that's in line with the market cap method above.

*cost is based on AU$14 and 100,000 per month output of silver.


Finally don't forget NOVO has debt of over $60 million USD (secured and a 2% fee on all gold produced.
Jadar - NO debt and NO FEE to pay and it also has Lithium assets!

By the way their cautionary statement at the end - "A decision by Novo to place the Beatons Creek Project into production following the completion of the Acquisition might be made without being based on a technical report, preliminary economic assessment, pre-feasibility study or feasibility study of mineral reserves demonstrating economic and technical viability"

Jadar's Silver is all ready to go with 1.5MT sitting on the pads and we have all the appropriate JORC and technical reports.



Novo-Acquisition-Presentation-FINAL-Aug-4-2020.pdf