Let me restate the valuations. The main Mbalam / Nabeba (per DFS + PSF) project plus SDL CASH less “Related Corporate Costs and Social Taxes has been valued net by Ernst Young at approximately LOW: $960m = 31c per share Midpoint $1236 = 40c per share HIGH $1549 = 50c per share
Optiro have valued the remaining JORC compliant ore (only) outside the Project at LOW: $241m = 7c per share “Preferred” $345m = 11c per share HIGH $451m = 15c per share
Therefore valuation midpoint for JUST the JORC compliant ore is 51c.
Now here’s the rub.
SDL’s exploration target is 9.25- 13.15 BILLION tonnes of ore. TWO TO THREE times the current JORC compliant ore. What does Optiro value this at???
Page 56 has the answer:
LOW $7.1 million: “Preferred” $10.7 million: HIGH $14.2 million. That’s million not billion….
That’s a preferred value of less than ONE THIRD OF ONE CENT per SDL share for ALL of the exploration potential otside JORC!!!!
The valuation attributable to joint ventures associated with first mover infrastructure advantage is valued at precisely NIL….
Not only are supposed to get just 45c from Hanlong for the project (and JORC ore) ONLY worth 51c midpoint. In effect we thus are getting MINUS 6c for all the rest of the potential.
I vote NO.
SDL Price at posting:
38.0¢ Sentiment: Buy Disclosure: Held
