It is with amazement I log in this morning to see the gold price at an astounding US$1700 or AU$2,569
Gold is trading at all time highs in AUD terms.
GTE is currently capped at $3.7M, soon to have $1.1M in cash and no debt. An EV of just $2.6M is shell value. GTE has 3 distinct assets that are all worth more than $3M IMHO.
1. SANDFIRE JOINT VENTURE
Sandfire may initially earn 70% by delineating at least 50,000 tonnes in-ground copper Mineral Resource with a minimum exploration spend of $1.7 million over three years and $500,000 of Sandfire shares upon the agreement becoming unconditional. Exploration is to be carried out by Sandfire, which has one of Australia’s most successful exploration teams having discovered the nearby Degrussa and Monty VMS deposits. Sandfire also has significant infrastructure including a treatment plant at Degrussa, located approximately 25km north, which is within trucking distance of the project.
A figure of anywhere from $1 to $3Miln can be put on the SFR JV IMHO.
2. LAKE WAY POTASH
GTE own the adjoining potash tenements to SO4 at Lake Way. S04 have already mapped their highest grade potash in the region as extending directly into GTE's tenements with the widely held view that GTE hosts the highest grade potash in the region.
SO4 recently acquired potash assets from BLK for consideration of $20Miln. Whilst the deal included other items, a figure of more than $10Miln can be attributed directly to the potash resource.
GTE have confirmed in recent announcements they intend to sell the deposit or seek a partner to develop it. Considering that SO4 have offtake for around 90% of their potash now and over $45Miln in the bank it makes sense that they will make a bid for GTE's potash tenements. SO4 would not want another neighbour getting into production on their doorstep and challenging them for offtake.
A figure of anywhere from $1 to $10Miln can be put on the potash IMHO.
3. YANDAL WEST GOLD (VMS POTENTIAL)
GTE most exciting asset and one that holds the most potential is their Yandal West gold portfolio which they believe is prospective for VMS deposit
GTE have encountered shallow high grade gold all over these tenements and have additional drilling immediately planned to follow up high grade results that are open in all directions.
When you compare GTE's gold results to other peers in the market they are worth well over $10Miln. The market is not valuing GTE on its gold potential at the moment due to lack of activity. I am confident that once the drill is in the ground spinning it will make people notice how cheap this is and it will get a rerate to over 1c as it should be trading.
SUMMARY
GTE are sitting on potash assets that should easily be able to be sold for anywhere from $2 to $10Miln. A sale of these assets would fund the company for the next 1 - 2 years and allow aggressive exploration on their gold tenements whilst gold is trading at all time highs.
If you value the assets like this SFR Joint Venture - $1M Potash - $3M Gold - $3M
You can see GTE has potential to double in price and just to get to basic valuations.
GTE is my highest conviction small cap investment.
GTE Price at posting:
0.3¢ Sentiment: Buy Disclosure: Held
