On Livewire yesterday seasoned mining reporter Barry Fitzgerald said " On a look-through basis, Zenith’s share price gain has been underdone. Compared with Rumble, its market cap should be up by some $58m or 20 cents a share.It’s actually up by $32m or 11 cents a share. The implied discount for its share of the Earaheedy discovery is common stuff for junior partners generally, and may or may not be unwound as time passes."
The difference between my analysis (see my post above) and the Livewire article is the starting point. I used the RTR 8 April announcement while Fitzgerald used the 19 April announcement. The 8 April announcement hinted Earaheedy may be exceptional while the 19 April one confirmed its potential. Arguably you could use either.
Regardless of the starting point, ZNC price appreciation has been significantly underdone compared to RTR. Fitzgerald seems to suggest this is a common 'early situation' junior partners find themselves in, on a big find. Sometimes things even out over time and sometimes they dont. Let's hope as ZNC shareholders this evening out process happens as it would be worth 11c (Fitzgerald) to 20c (my calculations) right now.
One further point made by Fitzgerald I really like. "Reports from brokers during the week that much of the buying for the stock was coming from exploration professionals.....(and that confirms Earaheedy's potential)"
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