Flagship Property: Romero Project = 100% Ownership … 1 Point
Resource Base = 2,265,000 AuEq … 1 Point
F/D Share Structure = 291,057,724 … -1 Point
Recent Price = US $0.14
F/D Market Cap = US $40,748,081 … Unrated
After-tax IRR = 28% … 1 Point
NPV/CapEx = 128% … 1 Point
F/D Market Cap Valuation per Resource Ounce = $17.99 … -1 Point
In other words, each AuEq ounce in the ground is valued at $17.99 by market cap. The relatively small resource base relative to number of shares has impacted this factor negatively.
Share Price Valuation by Resources in the Ground @ $1,250/oz
Each share is worth .008 AuEq ounces in the ground. In other words, each share is worth $9.73 AuEq in the ground. This is low. Hence the low market cap.
Cost Structure = 45% … 1 Point
Cost Structure is less than 1/2 spot Au. This is excellent. This future junior producer will have a great deal of leverage to Au at higher prices.
Resource Valuation as a Percentage of Market Cap
Value of Resources @ $1,250/oz Au = US $2,831,250,000
In other words, the market cap is valued at 1.4% of the value of the Au resources in the ground. This is low. There is room for substantial market cap growth.
Near-Term Cash Flow = US $71,365,000 … Unrated
Near-Term Market Cap/Cash Flow = .6 (60%) … 1 Point
Future Cash Flow @ $2000/oz Au = US $153,115,000 … Unrated
Future Market Cap/Cash Flow = .27 (27%) … Unrated
P/FFCF (Near-Term Market Cap / Future Free Cash Flow) = 0.7
GoldQuest Mining is undervalued. It is cheap in relation to its Future Free Cash Flow. We believe GoldQuest Mining will be progressively revalued as it reaches the following next-level licensing milestones: Exploitation, Environmental
Debt Coverage = 0 Debt … 1 Point
Projected Future Market Cap = US $453,000,000 … Unrated
Projected Future Market Cap Growth Percentage = 1,012% … 1 Point
Location: Dominican Republic … 1 Point
Romero won’t be a large mine, but it will be an efficient, well-managed, forward-thinking mine with large gross profits. It is also one of a handful of development-stage projects that we can think of that has explicitly aimed to incorporate ecological best-practices; management has also proven adept at negotiating Dominican politics. At higher Au prices, we believe GoldQuest Mining will be revalued quickly to better reflect its intrinsic value. At $1,250/oz., we think an acquirer would pay between US $0.97 and $0.75 for the company. Our own target is somewhat more modest.