NB - I was a holder ... no longer hold but this is my perspective as I had some valuation worksheets handy ( plus also offered to help out
@Davisite )
Okay, here are some basic numbers after first looking at the offer ...
Just working out what the reserve component of EGA's resource is worth in comparison to Silver Lake's existing reserves ... a simple valuation comparison method as it only considers the part of a gold asset (the Reserve) that has been drilled enough to be considered in the mine schedule for contributing to production.
View attachment 1670989Essentially SLR are offering less than 10% of the AUD value per ounce compared to their in-production assets.
Even as a rough rule of thumb EGA should be worth 35% of the in-production value given they are approved by Department of Mines. Also note the EGA project will give SLR an asset at a much lower AISC ( AISC over 13% better than their average AISC from their existing production assets).
For perspective, recognise that GOR were valued at approximately 60c before the JV with Gold Fields ( before they were fully-financed). About 42% of their value now following first Gold ( now $1.38 ).
So using a more conservative rule of thumb value per ounce at 35% of value of per-ounce value of reserve:
- $2,302 x 0.35 = $805 per ounce
Calculating minimum value.
- $805 (rule-of-thumb value) / $213 (offered) x $0.40 = $1.51
It's also very clear we are close to entering a gold bull market. That should attract a higher valuation. The board should be looking for better offers.
The above aside just using a
very conservative P/E 10.0 ... my in production target is $2.91 ... (see below)
( but taking 35% of $2.91 suggests a minimum value of $1.01 ... but I think $1.151 is much more justified ... the $0.40 offer received is only a fraction of this ... 13.74% of my $2.91 target )
View attachment 1671031
