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EV valutaion - BLK vs DRM vs SLR vs BDR, page-4

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reggie78

2,167 Posts.

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07/07/16

23:20

Post #: 18221052
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Originally posted by speculator101 ↑

Hey DF. Good spreadsheet and I hope over time you might be able to update it etc.
Please take my comments as straight shooting, no negativity intended.
You might find it easier to just use AUD for everything (even though obviously BDR receives USD) as it just simplifies everything.

One thing that you probably should include is the number of mines that companies have, i.e DRM have two, which reduces operation risk. DRM LOM is 4 years for Andy Well and 6.5 for Deflector, but... U/G mines like Andy well are almost a certainity to be extended, just the nature of the deposits, so I would add least make them equal at 6.5 years. Also I feel that should give the company some small premium to single mine companies like BLK.

BDRs 2017 forecast is 160k ounces. At an ASIC of approx USD $760 or, AUD $1040 (but I think this is conservative). BDRs LOM is 7 years minimum currently. Their last year was pretty average, but.. if you go back further, even with their terrible management, they made some amazing money.

I am running short on time, suffice to say, I view the gold sector like this, for every 100k produced at an ASIC of approx AUD $1000, a company should be valued at at least $400-500m (The bigger end of town are well above this rough metric, with the likes of RRL sitting at approx $640m per 100k ounces being produced). Very general and of course, heaps of variables can change it, but its where I start from. BLK has got a good mine life with reasonable ASIC, so I think $500m for the MC will be achieved once a couple of quarters are achieved.

DRM... Should see $700 million. i.e 140k or approx 1.4 x 4/500 = $560-700m.
SLR - not so good, as it LOM is terrible, plus so is its ASIC... I think its overvalued to its peers, but... IMHO
Should not get past the $350m market cap.

If you get time, another stock you might want to compare is RMS.

There are so many variables as I mentioned though, which of course should provide us all with some great discussion topics.

Good hunting.

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Great post Donald and Spec thanks for contributing guys!

Nice so "every 100k/oz produced at AISC of $1000 should be valued at least $400-500m MC" more or less....

BLK current MC is $217m today;

So in BLK case targeting 100k/oz p.a AISC guidance is $1130 so say $400m MC?

If BLK exceeds guidance to 130k/oz p.a AISC might be $1000-1100 so $500m MC, by Jan?

So market cap needs to more than double by Jan which is when BLK should have 5-6 months of production.

So again initial valuations look relative first target $289m over coming weeks as production commences, say by oct/nov $400m MC, Jan/Feb $500m MC!!

So we all agree plenty of upside in this baby yet under current POG!

BLK Price at posting: 91.0¢ Sentiment: None Disclosure: Held
5 Upvote

0 Great analysis

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