Love the question, hard not to let the mind run wild once you run the numbers. Below is my analysis, keen to hear thoughts on my general assumptions.
Nova released the following picture in the first Scoping Study:
From this, we can make a general inference as to the impact of each input, all other factors remaining constant. This analysis isn't fully robust, it doesn't consider the inter-relationships between these components or the updated strategy/ planning of the project. But like for like, we can make an assumption as to the
fair valuation for NVA based on the current MC/NPV %.
The pre-tax NPV was USD$381m, which equates to $568m AUD based on today's fx rate (0.67). If we assume a Gold Price in the SS2 of USD$1,900 (I think this is fair), the Gold Price has grown 8.6% between studies. My other assumptions for Grade, OPEX and CAPEX are below (left table is sensitivities from SS1, right table are my guesses for the SS2. I haven't tried to guess changes for Grade Control or Mill Recovery, and I've assumed that Inflation has run harder than expected in their original modelling):
Note, the above doesn't consider the growth in the Resources, I've assumed constant Production & static Resource size at 9.6Moz.
Thus, if we assume the market valuation is based on the SS1 NPV & is a
fair valuation (I certainly don't think the second point is true, but alas), we can infer the revised NPV under SS2 as a sum-of-the-parts (again, not truly scientific as the inputs don't move like this, but based on limited data this is the obvious viewpoint). See below:
By my rudimentary/rough calculations, we'd see an NPV of USD$1.33bn (or AUD$1.98bn), the Nova employees will receive their performance options, and if the market values us against this new NPV in line with the current NPV we'd see a SP of $1.57. We can quickly infer what this represents as upside..
Happy to hear any and all comments, or differences of opinion. Of course, I'm reminded that 'the market is a weighing machine over the long-term, and a voting machine in the short term", so I think the largest sentiment changes here will come through confidence in the Resource (Indicated/Measured), economical modelling with a strong IRR, approval of the access road, and achievement of the Company milestones as promised. As always, the above is my opinion, DYOR, etc. Cheers
(20min delay)