I'm beginning to question the upside of CHN too.So here's my...

I'm beginning to question the upside of CHN too.

So here's my very simple calculation for myself. Assuming production say in 2-3 years and total global annual production of Pd remain about 6-7mozs and let's say the market can absorb a further 10% increase per annum without affecting the price negatively, this would mean about 600kozs per annum for CHN. I'm discounting all others.

If CHN was to produce at 2mtpa @ 3g/t pge for 200kozs per annum in 2-3 years and increasing to 6mtpa throughput to produce 600kozs over another 2-4 years. I'm not taking into account Ni and other metals, just Pd pge equivalent.

If we take 30% as EBITDA and $3000 oz pge, that would be 3000 X 200000 X 0.3 = $180M per annum or multiple of 16X, give or take 2X for $3Bn mktcap.

Therefore, the total resource in the ground is not going to add much more value if there is more than 10X or 6mozs resource. So I feel Hartog is being priced in and will serve to confirm current valuation.

The Ni will add more value and if production reaches 600kozs in 6 years time, assuming same PEs, CHN might triple over 6 years but 600kozs is big ask?

One of the directors sold recently, so I've followed him and sold 50% into this rally. There's probably more upside but I'm happy to have sold half.

glta dyor aimo