It all comes down to how you view the prospects of Alpha and East Tennant. If you are in it for a short term trade then as with most other junior explorers your emotions will swing widely up and down depending on the share price on any given day. If you are willing to take a medium/long term view then the bitumen asset of Alpha alone has the potential to produce $100M EBITDA. What market cap would you apply to this? I would suggest circa $500M at approx 5 times EBITDA or around $1.10 per share after some dilution. Putting the bitumen revenue aside, there is more to learn about Alpha so the upside potential for more revenue is significant and could end up being multiples.
The icing on the cake for GRV is East Tennant, and we all know how yummy icing can be! I don’t know of a better prospect in the country for IOCG. The gravity, magnetic and conductive anomalies of this area are pointing to a major future discovery. There are a few players in the area including NCM, GRV, ICG, MDI and SER. If and when one of these companies hits something decent, the others will benefit from the nearology.
My fingers are crossed it’s GRV with a monster hit sometime this year. If you have confidence in the potential of GRV as I do then any short term weakness is an opportunity to accumulate. The best is yet ahead of us in my opinion.
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