Hi AllI did some basic valuation analysis for potential sp for...

Hi All

I did some basic valuation analysis for potential sp for EKM from here


To arrive a per share price valuation for different scenarios I centred this on.
1. EV/Oz (A$/oz) using peer comparisons of goldies from EKM's march investor presentation
2. Estimated base case market cap/oz multiple for EKM of 29 (consistent with what EKM presented in MArch presentation) based on current confirmed JORC resource base of 749k oz, current share share price of around 11 cents and share on issue of around 195m.
3. I then looked at the upside case of EKM being re-rated due to having a sizeable resource base that is economic to mine based on revised JORC being released. I therefore use from March presentation market cap/oz multiple of mid tier goldie peers who fall in this category (e.g. IGR) who trade at a multiple of around 100.
4. So then applying my market cap multiple base case(29) and upside case (100) I multiplied this by different oz resource scenarios namely 749k, 1.5m, 3m, 5m; divided by 195m shares on issue to arrive at different sp valuation scenarios based on current EV/Oz multiple presrcibed to EKM for different oz potential JORC estimates....and upside case (based on EKM achieving higher EV/oz multiple on assuming higher and economic resource base to move to next stage of production planning)...

5. I don't know how to post excel spreadsheets so I will summarise per share valuation price ranges came up with from above analysis below. Note sp valuation for different oz scenarios in brackets are cents per share valuations for EKM

6. Market cap/oz multiple of 29: 749k oz (11), 1.5m oz (22); 3m oz (44), 5m oz (74)

7. Market Cap /oz multiple of 100: 749k oz (38), 1.5m oz (76), 3m oz (1.53), 5m oz (2.55)

Just some different possibilities for you to consider, and note applying base case of 29 multiple is absolute worst case as Ian has already inferred they have enough resource to move to production planning (trucking option) so EKM will be expected to be re-rated once announces revised JORC following current drilling program...

Once revised JORC comes out after current drilling program I will be updating this table.