Market is mispricing developers IMO. Please excuse cross...

Market is mispricing developers IMO.

Please excuse cross promotion of sorts (I don't own)

GPR have a 1.6Moz deposit, 1Moz Reserve, a pre-tax NPV8 of over A$500 at current gold prices and have raised $40m for capital expenses. All they need is debt funding and they are on the way to developing their resource. Maybe some sovereign risk for being in PNG. Trading at an EV of around $40m now.

They raised at 2.5c for development and now trading at 1.8c. IMO that is way too cheap. 1st year cashflow will be more than their current MC. That makes no sense.

Market needs to revalue some of these assets or they will get taken off our hands for a pittance.

Take the GPR example. Plenty of majors working in PNG that know the conditions. Easy to take it out for a pittance on their paper valued at $300+ per reserve ounce. Easier for majors to get debt funding. Equity component already done. They are steals.

Yet for some reason all anyone wants to do is sit around and complain about how shit things are instead of buying cheap assets. These are being priced as if gold is going back to $1,200 in the short term. If you believe that then no reason to hold. If you believe we see a washout to $1,400 and then a swing higher to $1,600 or $1,700 (possibly $2.5k+ AUD gold) then there will be some major bargains.

We will have 2Moz+ by end of field season. Maybe more like 2.2Moz.

Only need about 700-800koz of those to be clean, cheap reserves and the company will have a good NPV. Once that happens the rest of the ounces become more tractable as capex costs have been funded. Plenty of exploration left in the tank.

I think there has been so much pain in the gold sector for so long that people still aren't believing the run. There is a strong dichotomy where producers are holding ridiculous values because they are already there churning out ounces and no-one is game to touch the juniors so they are valued ridiculously at the other end of the scale.

All IMO etc etc. I am getting spanked like everyone else so market doesn't agree. Yet