1 / 5

Overview of Analyzing Mining Companies March 14, 2012

Overview of Analyzing Mining Companies March 14, 2012. Chris Callahan | Mining Portfolio Manager.

odessa
Download Presentation

Overview of Analyzing Mining Companies March 14, 2012

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Overview of Analyzing Mining Companies March 14, 2012 Chris Callahan | Mining Portfolio Manager This presentation is for informational purposes only, and is not an offer to buy or sell or a solicitation to buy or sell any securities, investment products or other financial product or service, an official confirmation of any transaction, or an official statement of Limestone Capital Investment Club. Any views or opinions presented are solely those of the author and do not necessarily represent those of Limestone Capital.

  2. Table of Contents • Mining Resource Classification • Primary Steps to Production • Key Factors for Resource Valuation • Valuation Methods

  3. Mineral Resource Classification National Instrument 43-101 • Technical Report outlining process for evaluating resource, report on reserves made by third party • Obtainable through SEDAR.com • Created after the Bre-X incident in 1997 • Company used a core to estimate reserves using gold that management inputted themselves, turns out there was no gold at all • States • Measured, Indicated, Inferred, Proven, Probable • Important Metrics: • Cut-off grade: Lowest grams per ton of the commodity beyond which it is not economical to extract the commodity from the asset in question • Equivalent grams/ton:Junior mining companies may use this metric to deceive investors. Ratios are just as important as the cut-off grade for a complete analysis NI 43-101 Production Key Factors

  4. Steps to Production Steps to Production NI 43-101 Pre Feasibility Study Feasibility Study Bankable Feasibility Study Timeline to Production Production NI 43-101 Production Key Factors

  5. Key Factors for Analysis Management Property • “Who are the key players involved with the company?” • Research management biographies • Sedi.ca • Research previous position successes • Company with bad reserves with good management can be a good buy • Euromax, tripled in value just because they hired Steve Sharp. • Between 95% and 99% of mining properties do not go into production • Due to costs and economic variables to produce at profit • Minimum of 50 Million to build a mine • Search for Big Deposits (Big Upside) Recent Financings Political Factors/Risk Valuation Metrics • Match up companies objectives to its current finances • Look through press releases to see past financing rounds • Match up expenditures/CAPEX with financings • Can make or break a promising junior stock. • Majority of Gold Deposits are found in third world countries • Nationalization Threats • Royalties/Taxes • Precedent Comparable Transactions • Resource Comparable Ratios: (EV/Total Resource) • DCF (Not Applicable for early stage projects) NI 43-101 Production Key Factors

More Related