Following on from the previous informative posts, I aimed at getting a comparative look at the potential SP for HGO.
I found the below table is an extract from a Livewire article from May 2021. They state that Aeris Resources (AIS) produced between 23 and 30K tonnes of copper per year in the previous decade, which I thought could be used as a realistic comparison. From what I can see AIS's ASIC is quite a bit lower than ours, but HGO require very little funding.
https://www.livewiremarkets.com/wires/there-are-only-4-copper-producers-left-on-the-asx-only-one-is-below-intrinsic-valueDuring May 2021 the SP for AIS varied between $0.10 and $0.20, with the article suggesting that it should be well north of $0.30.
Today, copper is priced similarly to then and the SP for AIS stands at $0.145 (MC=$327MM). HGO's MC = $104MM)
HGO is looking at producing 36K tonnes in stage 1, and currently has a PE of 1.
So in simple terms, I suggest that the SP for HGO should be at around $0.15 today.
If we got to a PE of 3, which is still conservative, the SP should get to $0.45.
Imagine what would happen if the price of copper increased meaningfully??
I am convinced that HGO is dirt cheap atm and that we will see some impressive leaps in the coming months.
