CST valuation against Scoping Study, page-4

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Investsavvy10

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24/11/20

12:06

Post #: 49097561
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Originally posted by BobbyMorane: ↑

Hi fellow holders and non-holders.

As I'm getting fed up seeing CST getting hit harder than most goldies despite being a "diversified" gold play, I figured I might as well share some napkin analysis based on the scoping study.

I'm out of cash to top up and have no intention to sell, so why the hell not.

Scoping study's numbers Rover 1 :101m$ capex
35.000 ozpa gold
4 ktpa copper
349koz gold resource at the time (vs 386koz now)
53kt copper resource at the time (vs 83kt now)

Gold price used => 1100$us/oz (vs 1830$us now)
Copper price used => 7000$us/t (vs 7200$us now)
Exchange rate => 0.9 AUD/USD (vs 0.73 now)

Or AUD Equivalent :

Gold price used => 1220$au/oz (vs 2523$au now)
Copper price used => 7778$au/t (vs 9863$au now)

For the scoping study scenario, Westgold estimated a net cash flow of 118m$.

They also did a sensitivity analysis for additional resource and found that a 50% upgrade in resource size increased net cash flow by 84% to 217m$.
And a 100% upgrade resulted in 394m$ of net cash flow, a 234% increase !

Now why is this interesting ?

I've read numerous times on here that the resource is too small and too deep. And that this is not economical without a massive resource upgrade.

THIS IS NON SENSE.

Westgold had the project generating money at a whopping 52% gold discount and 21% copper discount compared to current prices in AU$ terms.
And with a gold resource 10% smaller and a copper resource 36% smaller than it is now.

Let's think about it for a second.
At 35koz per annum and with a 1300$au/oz difference compared to the scoping study's prices, this should generate an extra 45.5m$ in cash flow PER ANNUM on gold alone.

45.5m$ is more than our current EV...

And I know there is a lot of work before that materializes, but one can only wonder what would happen if we increased the resource by 100% compared to the scoping study at current metal prices.

link to the SS ann :
https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.asx.com.au/asxpdf/20101011/pdf/31t11ylvjv5mdp.pdf&ved=2ahUKEwjG2pnr4JntAhX4zjgGHW8DD-0QFjADegQIBRAB&usg=AOvVaw0f_St3ToWD_i-dBFHHfWjl

Expand

I'm also long on this gold / copper play as well. The Gold and Copper high grade resource is worth at current prices $1.8 Billion in ground value yet our market cap is $30 million (subtracting the cash at bank). I'm hoping the AGM and post AGM news flow is more consistent and really sets a pathway to production and aggressive ongoing exploration.

CST should be at a minimum a $150 million market cap right now and even that is ridiculously conservative.

CST Price at posting: 25.0¢ Sentiment: Buy Disclosure: Held
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CST valuation against Scoping Study, page-4

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CST valuation against Scoping Study, page-4

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