Leaving Badondo aside I think Mayoko is worth at least...

Leaving Badondo aside I think Mayoko is worth at least $300m.

Firstly this is conservative based on Exxaro's purchase of an identical asset next door for $350m.

My theory is someone could pick the asset up for $300, spend an additional $150m on capex and have 2 million tonnes per annum of low cost high quality Iron Ore production.

Free cashflow should be around $125m per annum ($125 sale price less $60 opex).

So 3 year payback on the asset which is pretty damn good.

WHat this does not factor in is the ability for production to increase to 5 million tonnes due to port solution. So plenty of upside left on the table for any acquirer.

I think Badondo could be worth quite a bit but at this point I would put a nominal valuation of $50m. I personally believe it will prove to be worth multiples of this.

And finally we have around $50m in cash which takes me to a grand total of $400m or about $3.20 a share.

I think the key to unlocking the value of EQX will be funding for Mayoko project. If we bring in a partner it will give us a look through valuation of the asset which I anticipate will be in the ballpark of $300m.