Calvista’s Gold Resource Matches Galway’s at California
When I wrote up Calvista in March what is happening in Columbia particularly in the California District is something special. What it looks like is one massive mineralized high grade trend with a lot of this ounces open pittable. The mineralization is continuous, it has a consistent grad, mineralization is the same meaning recoveries will be identical. More importantly, if there is a mine to be built down there by AUX; GWY and CVZ need to be consolidated before that can ever realistically happen.
Back in March when I wrote up Calvista, I suspected there would be a very good arbitrage opportunity expecting the work programs on CVZ’s properties would yield results nearly identical to Galway… and despite lacking some extremely high grade intervals that GWY has pulled, the projects are nearly identical and should receive almost identical valuations when it comes to a buyout.
Galway recently released an initial resource report and CVZ just update theirs today and oh boy oh boy… yes indeed there is a massive arbitrage opportunity between the two companies.
So let’s compare the two companies… GWY $144M market cap CVZ $39M market cap.
| M & I
| Inferred
| Total Ounces
| Valuation / ounce
|
| Au
| Ag
| Ounces
| Au
| Ag
| Ounces
| Resource at 1.0 g/t cut-off
| CVZ
| 2.22 g/t
| 11.61 g/t
| 719,113
| 2.43 g/t
| 10.87 g/t
| 804,954
| 1,524,067
| $25.59/oz
| GWY
| 2.08 g/t
| 4.37 g/t
| 1,142,287
| 3.09 g/t
| 4.96 g/t
| 533,840
| 1,676,127
| $85.92/oz
| Resource @ 2.0 g/t cut-off
| CVZ
| 3.49 g/t
| 15.77 g/t
| 452,218
| 3.71 g/t
| 15.84 g/t
| 449,023
| 901,241
| $43.27/oz
| GWY
| 5.38 g/t
| 6.36 g/t
| 666,470
| 5.53 g/t
| 6.93 g/t
| 424,385
| 1,090,855
| $132.01/oz
|
This comparison does not include Galway’s high grade Vetas system, but for me… the mine is going to go in at California first so Vetas in my opinion does not get any value. Calvista has also defined a high grade silver zone that has 314,402 ounces at a grade of 1.75 g/t Au and 3.3M ounces of silver at a grade of 18.38 g/t Au.
At any rate, from these resource comparisons it is clear to me that CVZ land is nearly identical to GWY land and should receive a valuation in the vicinity of GWY and not discount 60 to 70% that of GWY market cap.
Christopher Skidmore
Beat the Market Stock Picks |
