1/9 Anybody have time for #MonkeyMath? We don’t know if Appia will have to same resource size or value as Round Top. What we can do is use comps to arrive at a value for Appia IF IT DOES. Then makes some extrapolations at different resource sizes. 
2/9 One thing Appia has going for it (and this is a very big deal) is that they will have lower capital costs due to the province providing the capital intensive processing facility.
3/9 Working from the end, Tom estimated that TMRC might arrive at a $5.07 price per share based on 46.6M shares outstanding and a future market cap of $236M dollars. That was based on 30% ownership at the time of writing.
4/9 This is not the current assumption but we will stick with it for valuation purposes.
So, 30% of Round Top is worth a MC of $236M then 100% of Round Top is worth $786.6M MC. Appia has 74M shares out right now and 89 fully diluted. Let’s work with the FD number.
So, 30% of Round Top is worth a MC of $236M then 100% of Round Top is worth $786.6M MC. Appia has 74M shares out right now and 89 fully diluted. Let’s work with the FD number.
5/9 $789.6M MC divided by 89M SO gives us a PPS of $8.84. Keep in mind USD assumption on the based so CAD/USD conversion rate will have an impact. If we assume the $8.84 we arrived at above is based on USD figures then we would discount by .77 today and arrive at $6.81.
6/9 What if Alces Lake is half the resource size? The we are looking at $3.41 CAD. (You get the picture.)
There is also discussion to be had about how valid these base numbers are. Round Top is going to be easy mining, year round, with excellent infrastructure.
There is also discussion to be had about how valid these base numbers are. Round Top is going to be easy mining, year round, with excellent infrastructure.
7/9 Alces will be seasonal to some degree and it is more remote so it may require capital improvements in this area. On the plus side, the grades at Alces are an order of magnitude higher than Round Top.
8/9 That taken in to account along with the fact that no capital needs to be expended for the processing plant likely tilts the balance in Appia’s favor.
9/9 I am not a fundamental analyst and this is just piggy backing if a very simple manner off of another’s work (Tom Fahy) but it gives you some ideas to begin to formulate a framework withing.
