Scotia McLeod Report of March 19 (excerpt):
Crystallex's sole other assets are around C$31 million ($1.0/share) cash and the small 15,000 oz./year Albino mine in Venezuela, which hosts resources of 300,000 ounces and must now convert from an open
pit to underground mine which requires rebuilding the mill circuits and driving a ramp to the narrow veins below the open pit, both of which would greatly increase the cash cost from the open-pit $150/oz.
At current metal prices Las Cristinas is worth only US$0.77/sh to Placer, the project having very marginal economics at current prices....
We estimate a value for Crystallex, on the basis of its current assets, of no more than C$1.50/sh Should they gain control of Las Cristinas 4 & 6, which host 75% or so of the reserves of the whole property, the value translates into about C$3.40/sh, making no allowance for dilution. While it would take an extra 2+ years needed to bring it into production compared to Placer, this would place a near term target price on the stock of about C$4.90/sh, making it overvalued under any circumstances. The amount of cash might make it an attractive merger candidate for a cash-strapped junior producer, although the potential for suits must be considered. (End of the
page I was sent.)
Just thought you'd like to know. |
