cvy valuation

Following my post last week, I have now done some further analysis below:

EV/Oz Discount

Coventry has a resource of 1.005Moz of gold with a great degree of upside. Based on the capital raise price of $0.22, CVY has an enterprise value of $19.3M and an EV/Oz of $19.20. This represents a discount of 76.9% to the EV/Oz of other emerging producers, which is $83.


Capital Structure & Valuation Target

Based on the market valuation of comparable gold companies with a similar degree of sovereign risk, I have devised a valuation target of $0.76 to $1.60 per share, dependent upon the size, continuity and grade of resource that Coventry ultimately certifies.

The valuation does not incorporate dilution for any further financing arrangements for a processing plant. I would expect a mix of debt and equity to be employed should studies indicate that mining at Cameron Lake and/or Ardeen is economic.



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Assumptions:

Capital Raise approved by shareholders.
Capital raise issuance of 45.45m shares at 22cps and 6% + GST Corporate Fee.
AUD/CDN exchange rate 1:1.


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Assumptions:

$EV/oz from research 'Precious Metals Sector Update' Dec 2009 Argonaut Securities. Median Ev/oz for 'Emerging Producers'.