Hi All,Below is a quick comparison of FFX against some of its...

Hi All,

Below is a quick comparison of FFX against some of its West African gold mining peers in WAF (West African Resources) and RSG (Resolute Mining). My views only - please DYOR.

Outcome - on a EV/FWD EBITDA basis it shows that if all three companies continue to execute towards their 5Y long term production guidance targets, FFX SP should similarly increase >4 times to get some sort of alignment with its peers.

Obviously all three companies should move up together proportionally if gold prices increase / sector becomes more bullish.

Calculation Basis;

• 50% of current FFX EV is associated with Morila gold mine (fair assumption given huge lithium market sentiment currently and all FFX SP appreciation of late has been associated with Goulamina progress).
• Target 5Y production guidance numbers used for WAF/RSG to ensure fair peer comparison, note this doesn't align with their current performance (eg. WAF Q420 AISC was $US 992/oz when 5Y target of $US 590/oz is used in the calculation below, similarly RSG upcoming average 2021 AISC guidance is $US 1200-1275/oz but have assumed 5Y target of $US 785/oz average in the calculation below).
• Assumed conservative FFX 5Y average all-in costs of $US 850/oz (ie. 60% margin on cash costs provided from 09/02/21 ASX ann - considered conservative as per initial post in thread above).
• Took credit for RSG's recent Bibiani sale and their other liquid assets (strategic investments/Ravenswood promissory note) to reduce RSG EV
• Assumed $A 75M debt facility for FFX (equivalent to the total forecast CAPEX from 09/02/21 ASX ann) to increase FFX EV
• No FFX production upside considered; eg. increase in FFX 4.5MTPA plant capacity (unused sag mill!) or identification of high grade zones which would increase their proposed 200kOz/annum run rate and hence their EV/FWD EBITDA ratio.

This peer comparison is just another method for showing how undervalued FFX is. Looking forward to seeing the FFX team execute and achieve the SP it deserves. Plus bring on Goulamina news!

Disclaimer - my views only; please DYOR to form your own opinions.
dgdgdm.