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20.5¢ wiluna mining corporation limited.

BLK EV and Valuation, page-2

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Bludog

83 Posts.

18

30/10/17

10:04

Post #: 28302273
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Originally posted by rumbai12 ↑

With the 20%+ fall in BLK on friday following the shocking Qtrly, it got me thinking, what is the Enterprise Value (EV) for valuation of BLK?

If the directors or Orion put this into administration- what is it worth.

Currently at the end of September there was $10M in cash and gold. If we assume they are losing $3M per month lets call it $7M.

There is debt of $37M. So cash = - $30M or -$27M.

They have spent close to $100M since 2014 by placements and debt on this project.

There are feasability studies confirming reserve of 1.1M oz and resource of 6M oz.

The expansion study has an NPV of $350M however you have to spend another $115m+ to do that.

For the last 2 quarters the grade has been 1.3/ & 1.4 g/t and AISC has been in excess of $2000/oz.

So on that basis, I can not see many parties wanting to buy it.

Under that scenario, there is zero equity value.

But lets look at it another way.

If all the development work, has now been done.

AISC could be reduced to $1400 - $1500, meaning profit of $100 - $200/oz and there was no expansion just focusing on 15,000 oz per quarter, 60,000 oz per year.

Then you could have EBITDA $6m - $12M per year before repayment of debt and tax.

Lets be conservative and say $6M. conservative valuation of $45M.

I would imagine that the grade would need to be more than 2.5 g/T.

Unfortunately it is not there now and until they produce at those levels, it is probably less.

I would say the expansion plans are over.

Just focus on getting production below $1400/oz and then it works.

If not it does not. Simple as that.

Good luck holders.

DYOR

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Well .. interesting analysis.Now that we have had all this detailed expert analysis from the non holders, can someone answer a very simple question.... WHO is it that is BUYING ..... and WHY?.

BLK Price at posting: 16.5¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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