What caught my eye was the conceptual production targets highlighted:
10,000 tonnes of Copper and 450 tonnes of Cobalt, annually. Assuming current prices of $7,000/t and $33,000/t respectively, this production profile would give rise to around $85MM of revenues. While obviously we have no real handle on the cost profile of the project yet, let's assume that it can eventually achieve an NPAT of 20% or $17MM, with GUN's share being just under half of this. In other words, if the metallurgical conundrum can be resolved (and recent media articles give a degree of optimism about this), then GUN could be earning around 3cps per annum from this project. Apply any normal 4-6x multiple or higher, and you can see just how undervalued GUN looks in the recent sell off.
And this is before you consider any potential upside in the future from the Coburn project if Zircon prices pick up.
DYOR, but this one looks as if the base is in.
GUN Price at posting:
2.6¢ Sentiment: Buy Disclosure: Held
