<$1.25, too good to be true>
Nominal valuations for deposits, even advanced staged ones are par for the course right now. Look at names like MFL, GLDR, ELD, TVX, NSU, MOY, MR, CBD, BAY, BGI, GBG. All are micro-caps with properties in various advanced or advancing stages, and almost all are low on cash, or have no significant access to capital. They all have deposit cost structures in top tier in the world (under 170 or lower on cash basis), yet at 265 POG are considered marginal or "uneconomical". See slide 14:
meridiangold.com
MNP is a tad cheaper owing to some of the apparent perceptions you've raised. Obviously none of these names are like investing in T-Bills, they are high risk, high reward endeavors and not all will work. I just feel the glass half empty (or more accurately all empty) view has swung way too far towards favoring the speculator who buys now. So to answer your question about "too true", I say that this market is not especially efficient on pricing these names. At 12 cents MNP has a market cap of US 3 1/2 million, and from my recent conversation with David Landrum had US 1 1/4 million cash. The market is attaching an enterprise value of US 2 1/4 million to the situation.
Looks like PNG has an opportunity to participate for 30% (including the landowner group). Of course they need to reimburse all prior and future costs, which at this point would be a windfall. You asked about management? These are people with great successes (Eskay Creek), but it's like coaching, as people want to know about the last few seasons (my dad was a well known college and pro basketball coach so I REALLY sympathize). I guess I'd have to turn the question back to you as, "who can you tell me has delivered championship seasons of late?" |
