Coventry (CVY) IS the lowest cost gold company and best...

Coventry (CVY) IS the lowest cost gold company and best valued.

Resource of 2mn Oz of gold should be firmed up in Canada. Comparable mkt cap company a $400mn AUD mkt cap company. CVY mkt cap $25mn WITH $10mn cash (assets valued at $15mn) and gold results due.

Many times a multibagger from here.


PLEASE SEE POST NO 5153258 (search in 'advanced search') FOR FULL COMPREHENSIVE VALUATION:


EV/Oz Discount

Coventry has a resource of 1.005Moz of gold with a great degree of upside. Based on the capital raise price of $0.22, CVY has an enterprise value of $19.3M and an EV/Oz of $19.20. This represents a discount of 76.9% to the EV/Oz of other emerging producers, which is $83.


Capital Structure & Valuation Target

Based on the market valuation of comparable gold companies with a similar degree of sovereign risk, I have devised a valuation target of $0.76 to $1.60 per share, dependent upon the size, continuity and grade of resource that Coventry ultimately certifies.

The valuation does not incorporate dilution for any further financing arrangements for a processing plant. I would expect a mix of debt and equity to be employed should studies indicate that mining at Cameron Lake and/or Ardeen is economic.



Assumptions:

Capital Raise approved by shareholders.
Capital raise issuance of 45.45m shares at 22cps and 6% + GST Corporate Fee.
AUD/CDN exchange rate 1:1.



Assumptions:

$EV/oz from research 'Precious Metals Sector Update' Dec 2009 Argonaut Securities. Median Ev/oz for 'Emerging Producers'.