$133 million is an insult for this valuable Canadian asset...

HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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$133 million is an insult for this valuable Canadian asset...

posted on Jun 11, 2021 03:56PM

Wyloo's offer should be taken as an insult to all the people who have been holding on to this share for decades now.

Rudimentary, rough calculations using fire sale estimates based on the value in the ground puts it a lot higher than what they offer. Let's say that there's $80 Billion worth in the ground and we say that it's going to cost 80% of that amount to extract that value from the ground so $80B minus $64B = $16B. Let's factor in a downgrade on the value because of uncertainties, risks, etc. and say that it's only worth 10% of that $16B so we're down to $1.6B. Divide $1.6B by approximately 420M shares, we get $3.81 per share. And a step further to factor in the fact that this mine will only be producing in 5 years using a 30% return, the present value (PV) of the shares would come in about $1.03 which puts the value at around $430M. That is with bare bones slashed down values.

If we use all the above figures and say that there's only $40B of value in the ground, then the bare bones PV would come in at ¢51 per share.

If we're quite generous and say that there is $80B in the ground and it's going to cost 75% of that value to extract = $20B value and again let's say that because of all problems as discussed above, that value is again further slashed down but only to 25% of that value, we're down to $5B divided by approximately 420M shares = $11.90 which give a PV of $3.21 per share.

How can Wyloo come in with a bid of $133M (¢31.5 per share) and how could an independant third party Valuator come in anywhere close to this measly $133M.

I know, this is not how you put a value on a company, but as Coutts mentioned, it will take a team of professional Business Valuators weeks to come to a conclusion on worth, so the work needed to do a professional valuation is beyond many peoples capacity - thus my rough calculations.

Anyway, thought I would put my ¢2 in. I've been a long time lurker but this is my first post. This offer just got my blood boiling. I may be way off (and I'm sure I'll hear about it if I am LOL).