Will try this again....the market is currently pricing mid-tier goldies around ~7-8x. Even attributing no value to Didipio I have OGC trading at ~5.4x. You can either play this game following momentum or trying to front run the crowd/market. I think the market is too hung up on the Didipio dispute and I think there's a few catalysts around the corner that will attract the crowd into the bid queue (as it has the last couple of weeks)...
1. I think the resource upgrades earlier in the year at Martha UG and WKP (both Waihi) were completely missed - this jumped to 12mt @ 6.7g/t for 2.6Moz! (5.9mt @ 6.5g/t M&I) The high level study due this quarter should hopefully wake the market up a bit to this. If they can get that 6-8mt at Martha and approvals at WKP there's no reason they cant double the throughput of the plant from 450ktpa to 900ktpa.
2. Like the above I think they've missed the exploration success at Haile (>500koz added through Horseshoe and Palamino)
3. I think they're missing the hedge book is in a much better place than peers (noting the below excludes the 48koz prepay in Dec Qtr @ US$1645/oz) - we should start to see this coming through the revenue line.. just 30koz per quarter for last 3 qtr's of the calendar year and its done.
4. I think they're missing the grade decline at Haile is temporary and part of mine sequencing. The company has always said the ~180koz guidance at Haile for 2020 was going to be skewed to 60koz first half, 120koz second half. The AISC looks bad for Q1 (~US$1550/oz) as a result of this but I could see this down to US$850/oz in second half purely from grade impact. High volumes and lower costs could have substantial impact on margins.
5. The big one - a decision on Didipio. As mentioned I think it is currently priced ~30% below peers without Didipio, if we get a favourable decision that moves to ~50% below peers and you could easily see A$6-$7/share. A favourable decision could even mean a sale to a local Filipino company which i think is being discounted.
