Bell Potter valuation $2, all systems go

Observations:


There is a little something for everyone in GOR's latest report.


Strong cashflows translates into almost guaranteed dividends (they wouldn't dare go back on their word, would they? Not after last year's fiasco). With a balance sheet that is debt free and cash and cash equivalents of $133 million GOR Is now in a prime position to distribute 22.5% (average) of FCF to dividends. FCF of $28 million annualized equates to $112 million (or thereabouts, ceteris paribus). With 880 million shares on issue we'd be looking at a dividend of 2.82 cents.




For those who are invested for SP appreciation, this is where the latter should eventuate. GOR is blessed with a myriad of options apropos of its 4,500 sq km properties, not including Yandina. I postulate that this is as much a curse as it is a blessing, as limited resources are stretched thin.

The mother lode that is Gruyere is yet to be discovered, but it will be. All in good time. It truly is a massive region, in the middle of nowhere, and it will be worth the capital it requires to uncover it.

To date though, the signs have been nothing short of extraordinary, and yet those signs have been accompanied by extremely little fanfare. If GOR's postcode had been DEG, the SP might be twice the price it currently sits at.

At Gilmour, according to the latest BD report, extensional drilling has returned several remarkable results:

 4.9m at 5.16g/t gold from 353.1m down hole in WDDD0052W1; 2m at 4.91g/t gold
from 190m in 20WDRC0273; and 5m at 1.09g/t gold from 131m in WDRC0274 in
the Main Lode style mineralisation;

 19m at 0.69g/t gold from 76m in WDRC0275; and 6m at 1.13g/t gold from 124m
in 20WDRC0270 in hanging wall folded veins mineralisation; and

 3.75m at 3.66 g/t gold from 535.35m including 0.24m at 26.86g/t gold in
20WDDD0051; 2.0m at 3.13g/t gold from 508.0m including 0.23m at 23.67g/t gold
and 4.0m at 4.24g/t gold from 426.6m in WDDD0053, which are from two holes
drilled to test for the presence of a potential new ore shoot, located 200m down
dip of the defined Gilmour Resource, that contained encouraging geology and
gold mineralisation, with typical Main Lode style veining, alteration and shearing
being intersected in the targeted position. These results confirm the potential for a
new shoot (Figure 1 over page) with over 1,000m of plunge extent, which remains
to be tested.


And at Smokebush:


10 RC holes and one diamond hole (results from which are awaited)
were completed, which was designed to define and extend the continuity of thicker high
grade mineralisation based on a new structural geological interpretation. The RC
drilling results included the following, which require further interpretation and follow-up:

 15m at 6.37g/t gold from 144m in 20SMRC0038 and 25m at 2.02g/t gold from
172m in 20SMRC0039 in the Central Zone; and

 2m at 23.07g/t gold from 116m in 20SMRC0045 and 14m at 2.23g/t gold from
108m in SMRC0042 in the Southern Zone.

Again, had the postcode been DEG and not GOR then social media would be singing Gilmour and Smokebush's praises. Herein, further, are just two of a number of multiple targets, each hosting potential deposits that, currently, have been promisingly albeit scantily defined.

Such as:

Recent exploration has also defined large regolith anomalies at Beefwood and Kingston. A
program of 209 aircore holes (of 16,830m) were drilled on 11 drill sections spaced 800m
apart over the Beefwood target. This program was designed to delineate potential primary
gold mineralisation beneath previously identified gold in transported cover. Results
identified numerous gold anomalies within the transported cover (such as up to 4m at
1.3g/t gold from 52m), and gold-in basement anomalies (up to 4m at 0.6g/t Au from 72m),
across prospective and newly identified structures. These encouraging results will require
follow-up infill aircore and potential diamond drilling during 2021. The large Kingston target
hosts multiple +100 ppb gold in regolith anomalies associated with the regional-scale
Smokebush Shear. A limited program of diamond and RC drilling to test some of these
regolith anomalies intersected gold mineralisation associated with quartz veins within
highly sheared felsic volcanic and mafic intrusive rocks for which a follow-up drilling
program is being planned for 2021.

Either/or a bonanza of epic proportions/just your regular multi-million ounce Gruyere awaits.

No need to be greedy.


Conclusions:

To reiterate, there is clearly something here for everyone.

With POG expected to hover much higher over the next few months this figure could go higher. And every cent counts. Utilization rates of nearer 90% (82% currently) would also translate into higher production and therefore higher FCF - all of which are balanced to some extent by increases in variable costs. However, the SOTA renewable energy system should eventually defray some of said costs.

By December 2022, if not before, GOR's hedging position which is currently $40 million under water should be done and dusted, thus presenting future investors with a pristine balance sheet. By then, GOR may have expanded its circle of operations (hence the $250 million credit facility) and most certainly its extensive resource base.

As Donald J Trump, the rightful president of the US (no longer the incorporated fiction of 1871) is fond of saying:


THE BEST IS YET TO COME!