marcos - GPD's Pan royalty alone may one day be worth 2x more than GPD's current market cap according to metal augmentor. By 2016 or 2017, 3 of their royalties will be spinning off to GPD's top line and bottom line 10,000 oz. At $2,000 oz we're talking $20m per year. Add to that the Gold Rock royalty, which is the Pan look alike except bigger and higher grade, just 8 km away from the Pan; and don't forget Brewery Creek. Check out the midway presentation at Denver:
midwaygold.com
Everyone knows how hard it is for juniors to get financing (eventual and inevitable mass dilution for putting straws in the ground and we wait for the greater fool to take the shares off our hands, please), but GPD doesn't have a problem with getting financing! Name me another $50m market cap co. that can get a $35m loan to put a property into production (Brewery). That it is selling at 153m basic x .275 = $42m is nothing short of extreme pessimism and it's pretty crazy if you asked me....
Silverax says it may be dead money and he may be right; I say it's a cheap down payment on what I think will be a 10 bagger, if one is willing to just buy some and put it away for 4, maybe 5 years. At this silly price you can pick up a big piece and just let it ride.
Reviews
Great News for Midway, but it doesn’t stop there
 Zurbo
Let’s do some math!
Using $1700 gold and assuming the average 81,000 oz per year production rate (likely very conservative longer term), Golden Predator’s (TSX: GPD) 4% royalty on the Pan project could conceivably be valued at north of $100 million in a market such as this that is awarding very generous multiples to the royalty companies.
$1700 x 81,000 x 4% = $5.5 million x your chosen multiple = $$$$
Here’s the fun part, I’m fairly confident the market is paying just about ZERO attention to this asset. How can I be so sure? Well, for starters consider that Golden Predator is trading at an enterprise value of roughly $40 million after having recently arranged a debt financing deal of similar size to bring its Yukon gold project into production in late 2014. That by itself should have been enough to jolt the share price back into life, but no such luck. It’s a buyer’s market out there, no doubt about it.
3 days ago
3 Responses to Midway Gold Announces US$70 Million Strategic Financing Comment RSS Feed
 31Floors
November 26, 2012 at 09:43 pm #1
Tom and David,
Thanks for the GPD related comments and especially thanks for being one of the very services that provide coverage on it at this time. I think you guys are early to the story, and the update you’ve provided is very actionable. I have been paying very, very close attention to GPD and backing it up w/ buys. As silly as this sounds for a sub $50m cap co, i think is one of the better risk/rewards on the Venture, and not just because of the ‘upside’ but remarkably, the limited downside!
Without repeating the potential and the projects, my basis for this comment is that it is located in two of the safest jurisdictions in the world and the stock price is simply so darn cheap that there is so much margin of safety built in, its laughable. It seems priced for certain defeat, and without hope.
Poor Jeff is going to have egg on his face. He has no malice but if you don’t know the company and the assets, then you won’t know the company based on the charts. And the comments provided can be so out to lunch, which is what he provided today with his sell now at .30. Sigh.
TA is TA, but TA and fundamentals, that’s the magic. Look up his comments on GPD, made during this evening’s market call.
stockchase.com
Bill has provided 10,000 oz guidance commencing in 2016, but this no. EXCLUDES Gold Rock, Midway’s ‘second’ property. It is a Pan look alike except that it will be bigger and higher grade. It’s located 8 km away from the Pan! The Pan has awesome IRR nos. at $1725 after tax 64 or 67% IRR and a 1.4 year payback. The Pan is now financed, it is SIMPLE, it will pay. Gold Rock will too and it will be right behind the Pan. Check out the Midway site and the Denver Presentation and the Nov presentation. I think a google should reveal Bill’s presentation at the same conf where I picked out the 10k guidance comprised of “3? royalty props, excluding Gold Rock.
31Floors.
 Rob
November 27, 2012 at 09:58 am #2
I’m with 31 floors here. I like the value on GPD. I added at .32 and may buy more if it keeps dropping. It is one of only 2 stocks I am even thinking of buying. PVG is/was the other.
Thanks for the info.
 silverax
November 29, 2012 at 01:29 am #3
The main concern on Golden Predator is the timing and how long it remains dead money … longer term there is obvious strong value. In any case, using technical analysis on a stock like this is inane … doesn’t tell you anything more than what is already obvious which is that the market doesn’t recognize the value and that will probably take time to change. To sell simply based on that is stupid for lack of a more refined term … doesn’t consider at all why you bought in the first place (which was probably because there is more value there than the market is giving it). As for Midway, they have some good projects and it is a company we have looked at seriously to buy but it would be nice if the valuation was a bit lower — much of the value the market assigns to Midway is probably for Spring Valley but I’m not really sure Barrick has figured out what they want to do there just yet. If and when they do, probably just end up buying out Midway’s interest and a number like $100 to $150 million cash would be a minimum I think. The shares should eventually trade back over $2 so if they can be picked up closer to $1 that would be a good deal in my opinion. |
