My concern is Intersuisse base their report on resources when there is a big difference between resources and reserves. Sure there may be more ore to be found and the share price will rarate to reflect that, but I would not pay for resources today as if they will definitely be mined. Today's resources are not reserves because they are not economic. Based on reserves only, Intersuisse's base case valuation is 30.5c.
Wilson's valuation appears to be based on unrealistic assumptions e.g. US$5.12/lb copper and US$1,90/oz gold, exchange rate of US$1.02.
I have seen HGO disclose cash costs, but has anyone seen the company disclose forecast net cashflows after exploration and development and corporate expenditure etc?
What is the payback time and IRR for the project based on the hedged/spot copper price and exchange rate?
Why is less than 20% of the reserves proven?
What are the terms for the first 80K of concentrate offtake with Sempra? What is the processing charge, what credits do we get for gold and silver, what are the payment terms?
Why was it so difficult to raise project debt. I know market conditions were not kind, but it seemed particularly difficult to get project debt for this mine?
I don't hold and have watched for a while - I would appreciate clarification of the above questions
Monty
HGO Price at posting:
26.0¢ Sentiment: None Disclosure: Not Held
