valuation based on recent news

A while back Straws showed us that Hubday bought Norsemont who had proven & probable copper assets in a remote part of Peru for 19.7c per pound for copper in the ground. The deposit was much smaller than Los Calatos and the copper rating was only 0.43%. To assume a value of 20c per pound for Los Calatos is being being quite conservative. I use Straws reasoning to produce the following update:

MNC's Q4 report states that they have 10.4B lbs of Cu in the ground at Los Calatos. So applying a valuation of 20c per lb to MNC's assets we get 10.4B x 20c = $2.08B. If we divide this by the number of MNC shares (now 1,456,000,000) we get a valuation of $1.43 per share which certainly captures my attention. But wait, there is more! Management are very confident that their current drilling program will enable them to double the size of the resource by September (think you will find MNC would then be bigger than Equinox !). So now we're talking a valuation of $2.86 per share which is roughly seven times today's SP. This is what we would expect a potential buyer to pay if MNC sold Los Calatos to a bigger company to develop (say RIO, BHP or VALE). Remember though there is a further 50,000m drilling program planned (and very probably even more down the track now that they have $37m or so cash) to grow this resource even bigger than double in size. So this company, in my opinion, has a very rosy future with SP growth in the multiples over the next couple of years.

MNC also has other significant assets though (and are looking to buy more) which I have assigned no value to despite the fact that they are all 100% MNC owned now. One of these is Cameron (gold) which could prove to be a bonus in the near future as drilling results are expected soon I think. Also Mollacas which has 17MT JORC of copper should add something like 3c to SP. We can expect some exploration of these assets now that they are owned outright by MNC and no longer held back by the fact that they were 50% owned by MN who had no money.