Hi i just joined the ranks of shareholders last week after the...

Hi i just joined the ranks of shareholders last week after the latest IGO-deal and spent some time over the weekend to dig a little deeper and do some calculations on “fair” value.
Of course the following is an over simplistic model and there are plenty of additional angles one should consider, but nevertheless, one could make a case, that AZYs share price has a lot of room to rise, by just applying the MC/cash ratio in the gold exploration sector given the current bull market in the precious metals. IMO AZY is severely undervalued when compared to similar exploration companies.
First i would like to thank onceover for his assessment, that AZY is essentially 4 explorer companies combined under one roof. I think that is a very prudent way to look at Antipa.
So we have:
1. Citadel- RIO JV with 11 Mio. already spent (=Rio 51%) with another 14 Mio to go into exploration in order to get RIO to 65%, and potentially another 35 Mio for 75%. (=AZY 35-25%)
2.Wilki - NCM JV with potentially 60 Mio. in exploration money for 75% (=AZY 25%)
3. IGO JV with potentially 30 Mio. in exploration (=AZY 30%)
4.AZYs 100% tenements Minyari/Judes/Waca with 723 koz AU @2g/t and 26kt CO @0,24% with 9 Mio AUD Cash plus the sparsely explored Reaper/Poblano/Seron with hits of [email protected]/t AU and [email protected]/t AU

Essentially that means 4 very well cashed up explorers (with little concern for future dilution) in a region, which has become one of the global Hotspots after GGPs Haverion discovery. Again for simplicity reasons if one would divide the current MC of AZY of 70 Mio. equally, each of the 4 sub companies would be worth about 17.5 Mio AUD.
Now i compared that to some other ASX gold exploration companies,with a similar MC that i am currently invested in, or which are on my watchlist:--Its just a short list, but in my experience other gold explorers are similar valued in the current market condition

-DAU (Kalgoorlie region next to NST/EVN/Zijng) with about 2 Mio in Cash ad 7 Mio. in market cap. MC/Cash Ratio of 3.5
-RML (Tintia goldbelt Alaska, next to NSTs Pogo mine) with 5 Mio Cash and 15 Mio MCMC/Cash Ratio of 3.0
-WRM (Tintia goldbelt Alaska in the middle of nowhere) with 7.5 Mio Cash and 22.5 Mio. MCMC/Cash Ratio of 3.0
-SVD (our direct neighbour south of WIlki, between Telfer and Haverion) with 3 Mio. CASH AND 12 Mio MCMC/Cash Ratio of 4.0

All these are explorers at the beginning of their first drilling campaigns with no gold discovered yet, and the market is in each case valuing these companies with a multiple of the potential “drill money” they are going to spent in the ground. If one would apply a similar valuation model for AZY, and considering the fact, that Antipa will eventually only own about 25-35% of three of these projects, after the Big Three Majors (RIO/NCM/IGO) reached their final farm in stage, AZY should be worth roughly the amount of cash that will go into exploration (MC/cash ratio of 1.0 for 25-30% of the project) and that would translate into a fair valuation of about 150 Mio MC, or in other words, more than double what it is today.

And even better, one could argue, that AZY should be valued at a premium since they have already a proven resource of 723 koz AU @2g/t (plus copper) on their own ground and roughly 1.3 MOZ AU (plus copper) below 1g/t at their Rio JV. Furthermore, while all the other explorers will eventually have to go through several rounds of capital raisings to prove up their resources (assuming they find some), AZY is practically already completely cashed up for the next years on three of their sub-projects.
And with RIO and NCM as partners there is most likely no need for Capex financing for these two JV, as Telfer is already there, and RIO will most likely built a mine at Winu anyway, which could start operating as early as 2023.

Then there are some catalysts for the region coming up in the near term, such as:

- the next drilling results from GGP/NCM at Haverion (end of July), where they are currently drilling 24/7 with 9 drill rigs
- the maiden resource definition for Haverion (speculations range between 5-10 Moz of AU)
-the announcement of the how the NCM JV (Wilki) will proceed with a possible timeframe for the drilling campaign
-maybe some further clarification from RIO in their next quarterly update

All of which should generate quite some positive news flow over the coming weeks and help with AZYs share price development. Again i am aware, that the above method is very over simplistic, and yes there is no guarantee, AZY and their JV partners will find enough minerals or high enough grade. And it would even theoretically be possible, that the JV-partners will at some point elect to not proceed with the farm-ins, but IMO that is very unlikely given the fact, that RIO planned to spent only 2 Mio. on exploration in 2020 back in January, but have since decided to accelerate the 2020 drilling campaign to 9.2 Mio. , which is already ⅔ of the 14 Mio. they have to spent over the next 3 years. So obviously the second biggest miner in the world has good reasons for this speeding up.
And by the way, Newcrest is also “fastexploring” at nearby Haverion, where they are setting up a big camp, with 9 drill rigs operating at 24/7 which one of Sprotts senior geologists recently described as something, that “he has never seen a Major like NCM do before”

The Paterson region is a world class gold/copper Hotspot at the moment and AZY, with such a huge land package in the area is ridiculously low priced at these levels IMO.I dont know if a double or triple valuation would be fair value, but i think a MC below 100 Mio is way too low, when compared to similar companies. And as an additional bonus, the downside risk is rather limited, due to the fact, that 3 of the 4 sub projects are essentially fully funded from Major Miners with very deep pockets.
DYOR