NTL - New Talisman Mine - New board & Directors

[jonu]

Sounds reasonable to me blackcap. I'm already in heavily at an average of 1.15. Looking at the volumes of those wanting to exit the announcement certainly brought out the sellers rather than the buyers. The old adage of the market being irrational longer than punters remaining solvent springs to mind. I think the sp story will be very different a little down the track, although Landymans 10 bagger might be a wee bit ambitious by my reckoning. Nice to dream though!

[robbo24]

Sounds reasonable to me blackcap. I'm already in heavily at an average of 1.15. Looking at the volumes of those wanting to exit the announcement certainly brought out the sellers rather than the buyers. The old adage of the market being irrational longer than punters remaining solvent springs to mind. I think the sp story will be very different a little down the track, although Landymans 10 bagger might be a wee bit ambitious by my reckoning. Nice to dream though!

Take any price above 1cps you can get. Another share purchase plan is on the cards. Why pay a premium?

[jonu]

Take any price above 1cps you can get. Another share purchase plan is on the cards. Why pay a premium?

Well, sometimes (almost always) prior to an spp the price is pushed up to stir interest and raise the spp entry.

[robbo24]

Well, sometimes (almost always) prior to an spp the price is pushed up to stir interest and raise the spp entry.

Tell that to WYN holders

People paying 3.30 per share to be in with a grin, Nek Minnit, now sitting around 2.30 with the spp completed at 2.36...

[MAC]

I had run some numbers and a risk free valuation just prior to the Chinese offer but was abruptly put off from considering any investment at that time not just because of the nature of the Chinese offer but also because management were actually considering it for a while there.

Revisiting it now on yesterday’s announcement, I’ve a risk free valuation and sensitivity analysis on the first stage development as below;

I wouldn’t contemplate buying into a junior gold mine start-up with greater than a five or six year payback and thus I have no focus or interest in second stage development economics at this time, each to their own risk management approach within this sector.

NTL Stage 1 Risk Free Valuation
Gold Price	$1,000	$1,100	$1,200	$1,300	$1,400	$1,500	$1,600	$1,700
Valuation	0.5c	0.8c	1.2c	1.6c	2c	2.4c	2.8c	3.1c

Basis: WACC 13%, PG at FY20 3%, 32,000ounces extracted over five years at US$750/ounce.

Risk aside, it seems priced to perfection about here ?

If anyone has alternate analysis I’d be interested in comparing notes with others as usual, online or offline ?.

many regards, Mac

[whatsup]

I had run some numbers and a risk free valuation just prior to the Chinese offer but was abruptly put off from considering any investment at that time not just because of the nature of the Chinese offer but also because management were actually considering it for a while there.

Revisiting it now on yesterday’s announcement, I’ve a risk free valuation and sensitivity analysis on the first stage development as below;

I wouldn’t contemplate buying into a junior gold mine start-up with greater than a five or six year payback and thus I have no focus or interest in second stage development economics at this time, each to their own risk management approach within this sector.

NTL Stage 1 Risk Free Valuation
Gold Price	$1,000	$1,100	$1,200	$1,300	$1,400	$1,500	$1,600	$1,700
Valuation	0.5c	0.8c	1.2c	1.6c	2c	2.4c	2.8c	3.1c

Basis: WACC 13%, PG at FY20 3%, 32,000ounces extracted over five years at US$750/ounce.

Risk aside, it seems priced to perfection about here ?

If anyone has alternate analysis I’d be interested in comparing notes with others as usual, online or offline ?.

many regards, Mac

Mac, is that U S $ or Kiwi $ ?

[MAC]

Mac, is that U S $ or Kiwi $ ?

Hi Whatsup,

I always use an NZD base, so gold price in NZD, valuation output in NZD, 0.85 exchange rate applied on US$750/ounce COGS.

At the present gold price of US$1,200/ounce (NZ$1,412) my DCF valuation on stage 1 is 2.02c, so around 102% upside from present SP.

At a gold price of US$980 (NZ$1,150) my DCF provides a breakeven valuation at 1.0c.

A forward gold price of US$980 is a possibility if we do enter a secular bull cycle. This seems though to represent a break even level for a lot of operations internationally and so may also though represent an industry floor ?

Forward prospective movements in gold price aside, I'm still weighing up the risk vs reward position on NTL, interested in your thoughts and others too ?

regards, Mac

[Stumpynuts]

Hi Whatsup,

I always use an NZD base, so gold price in NZD, valuation output in NZD, 0.85 exchange rate applied on US$750/ounce COGS.

At the present gold price of US$1,200/ounce (NZ$1,412) my DCF valuation on stage 1 is 2.02c, so around 102% upside from present SP.

At a gold price of US$980 (NZ$1,150) my DCF provides a breakeven valuation at 1.0c.

A forward gold price of US$980 is a possibility if we do enter a secular bull cycle. This seems though to represent a break even level for a lot of operations internationally and so may also though represent an industry floor ?

Forward prospective movements in gold price aside, I'm still weighing up the risk vs reward position on NTL, interested in your thoughts and others too ?

regards, Mac

Regards to news the other day - If Chinese investment is all but shot dead, then NTL could always try and get local capital via managed Kiwisaver investment companies backing them up in the future.

One example off the top of my head was Milford buying Burger Fuel shares. There will be countless others.

It would be good for NZ as a whole to tap into local investment funds instead to bring back them billions and billionswhich could be spent on improving NZ'ers quality of life.

[jonu]

MAC, from what I can see your valuation is based only on current proveable resource at Talisman and hasn't allowed for what they will find once they get digging. Also what about the Australian assets?

[MAC]

MAC, from what I can see your valuation is based only on current proveable resource at Talisman and hasn't allowed for what they will find once they get digging. Also what about the Australian assets?

Absolutely, there is a lot of potential there and all the potential in the world for the company.

Gold mining is a risky business, even JORC reports are no guarantee that the resource will prove to be actually economically recoverable although I do commend management in pursuing that level of work up.

It's just a methodology for me that I don't value forward revenue streams until they become, not necessarily proven, but 'shovel ready' let's say.

Gold price is a factor too and consideration of a 5 to 6 year payback is about my risk tolerance within this sector. Most small start-up gold miners do go bust, and for reasons that may not have been anticipated at the get go.

I'm positive on NTL though, they have a big future IMHO, they’ve worked up the pre-feasibility well and ticked all the boxes thus far.

I'm teetering though as to the risk/reward position at $0.012, I need to brood some more.