$UUUU : Energy Fuels — Independent Economic Analysis

Long-Term Price Case$65/lb. U308 $65/lb. U308
ProjectNichols RanchAlta Mesa
Mineral Resources7,195,000 lbs.3,617,000 lbs.
Shares Outstanding93,500,00093,500,000
Market Cap$287,980,000$287,980,000
Average Annual Production630,000 lbs.575,000 lbs.
LoM10 Years6 Years
Payable Product6,359,000 lbs.3,182,960 lbs.
True All-in Cost (TAIC)$41.36/lb.$38.61/lb.
Gross Revenue$413,335,000$206,892,400
Royalties($33,003,210)($16,519,562)
Gross Income$380,331,790$190,372,838
Total Operating Cost($69,376,690)(34,726,094)
Operating Profit$310,955,100$155,646,744
Income Taxes($26,707,800)($13,368,432)
Bonding(10,683,120)($5,347,373)
Total Capital Costs ($89,725,490)($44,911,566))
Restoration & Reclamation($16,024,680)($8,021,059)
JV Allocation($17,487,250)
Net Income$150,326,760$83,998,314
Net Profit Margin36%41%
Absolute Cost Structure (ACS)64%59%
True Value$2.51/sh.
Cash Flow Multiple10x
Annual Cash Flow$14,893,200$15,174,250
Future Market Cap$300,674,500
Future Market Cap Growth4%
Target$3.22/sh.

Notes: All Values in U.S. Dollars

Fahy Capital Management has enjoyed a 90% return on Energy Fuels, but we think the stock is overvalued by almost every measure at current levels. We are sellers.

$ASM : Avino Silver & Gold Mines — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au | $24/oz. Ag | $2.72/lb. Cu
ProjectAvino Mine
Mineral Resources50,525,000 AgEq ozs.
Shares Outstanding65,420,000
Market Cap$36,635,200
Average Annual Production2,731,357 AgEq ozs.
Recovery86% (Ag); 67% (Au); 91% (Cu)
LoM15 Years
Payable Product40,970,350 AgEq ozs.
True All-in Cost (TAIC)$12.06/oz.
Gross Revenue$983,288,400
Transportation, Refining & Insurance Costs($15,623,865)
Gross Income$967,664,535
Total Operating Cost($94,068,000)
Operating Profit$873,596,535
Income Taxes($327,598,700)
Total Capital Costs ($56,920,000)
Net Income$489,077,835
Net Profit Margin50%
Absolute Cost Structure (ACS)50%
True Value$7.48/sh.
Cash Flow Multiple10x
Annual Cash Flow$32,612,403
Future Market Cap$326,124,030
Future Market Cap Growth790%
Target$4.99/sh.

Note: All Values in U.S. Dollars

Investment Case
  • Measured & Indicated Resources have grown by 100% over the last 3 years.
  • Mine Life has effectively doubled.
  • Net Profit Margin and Absolute Cost Structure (ACS) are excellent at $24/oz. Ag.

Gold Data Analytics

As expected, broadly speaking, low Absolute Cost Structures (ACS) are associated with high Future Market Cap Growth (FMG) and substantially higher Net Profit Margins (NPM). One anomaly is Alio Gold, which has a study group-beating Future Market Cap Growth projection in spite of average-to-high ACS, as capital and operating costs are fairly low while share structure is tight.

When selecting stocks, the criteria on which we base overall investment decisions and weightings has grown stricter. We look for companies with True All-in Cost (TAIC)* on the lower end of the curve.

*TAIC, you will recall, includes G&A Expenses, Corporate Taxes & Royalties, Refining & Transportation Costs, Working Capital, and Exploration Budgets, in addition to all capital and operating costs. TAIC is, in our opinion, a much better reflection of a company’s true costs, as it makes an effort to include costs that are often excluded from related non-GAAP.

$MGDPF : Marathon Gold — Independent Economic Analysis

Long-Term Price Case$1,700/oz.
Flagship ProjectValentine Lake
Mineral Resources2,691,400 ozs.
Shares Outstanding159,431,702
Market Cap$145,082,849
Average Annual Production225,092 ozs.
Recovery97%
LoM12 Years
Payable Product2,701,100 ozs.
True All-in Cost (TAIC) $1,383/oz.
Gross Revenue$4,591,870,000
Reid & Keats Royalties($436,227,650)
Gross Income$4,155,642,350
Total Operating Cost($1,643,000,000)
Operating Profit$2,512,642,350
Income Tax($1,130,689,058)
Total Capital Costs ($525,000,000)
Net Income$856,953,292
Net Profit Margin19%
Absolute Cost Structure (ACS)81%
True Value$5.38/sh.
Cash Flow Multiple5x
Annual Cash Flow$71,354,164
Future Market Cap$356,770,820
Future Market Cap Growth146%
Target$2.24/sh.

Notes: All Values in U.S. Dollars

$ALO : Alio Gold – Independent Economic Analysis

Long-Term Price Case$1,700/oz.$1,700/oz.
ProjectFlorida CanyonAna Paula
Mineral Reserves1 Mozs.1 Mozs.
Shares Outstanding84,700,00084,700,000
Market Cap$65,219,000$65,219,000
Average Annual Production74,918 ozs.118,067 AuEq ozs.
Recovery71%85%
LoM9.8 Years7.5 Years
Payable Product734,200 ozs.885,506 AuEq ozs.
True All-in Cost (TAIC) $1,283/oz.$1,195/oz.
Gross Revenue$1,248,140,000$1,505,360,200
Royalty($57,414,440)($30,107,204)
Refining Charges($3,369,978)($3,542,024)
Gross Income$1,187,355,582$1,471,710,972
Total Operating Costs($662,900,000)($445,400,000)
Operating Profit$524,455,582$1,026,310,972
Income Taxes($136,358,451)($384,866,615)
Total Capital Costs($81,900,000)($194,150,000)
Net Income$306,197,131$447,294,357
Net Profit Margin25%30%
Absolute Cost Structure (ACS)75%70%
Total True Value$8.90/sh.
Cash Flow Multiple10x
Total Annual Cash Flow$90,864,641
Total Future Market Cap$908,646,410
Total Future Market Cap Growth1,293%
Target$10.72/sh.

Notes: All Values in U.S. Dollars

Alio Gold is an outlier: The Future Market Cap Growth projection is higher than for peers in spite of a comparable TAIC, as Total Operating and Capital Costs are relatively low while its Capital Structure is tight.

$GUYFF : Guyana Goldfields — Independent Economic Analysis

Long-Term Price Case$1,700/oz.
Flagship ProjectAurora
Mineral Reserves2,278,000 ozs.
Shares Outstanding173,530,802
Market Cap$130,148,102
Average Annual Production178,819 ozs.
Recovery94.4%
LoM12 Years
Payable Product2,145,827 ozs.
True All-in Cost (TAIC) $1,249/oz.
Gross Revenue$3,647,905,900
Guyana NSR($291,832,472)
Transportation & Refining Costs($6,931,021)
Gross Income$3,349,142,407
Total Operating Costs($1,516,043,000)
Operating Profit$1,833,099,407
Income Taxes($504,102,337)
Total Capital Cost($361,196,000)
Net Income$967,801,070
Net Profit Margin27%
Absolute Cost Structure (ACS)73%
True Value$5.58/sh.
Cash Flow Multiple10x
Cash Flow$80,647,369
Future Market Cap$806,473,690
Future Market Cap Growth520%
Target$4.65/sh.

Notes: All Values in U.S. Dollars

$VGZ : Vista Gold — Independent Economic Analysis

9-20-19 Updated PFS Analysis
Long-Term Price Case$1,700/oz. Aux
Flagship ProjectMt. Toddx
Mineral Reserves5,848,000 ozs.x
Shares Outstanding100,500,000x
Market Cap$80,400,000$82,410,000
Average Annual Production381,231 ozs.413,400 ozs.
Recovery92.7%91.9%
LoM13 Yearsx
Payable Product4,956,000 ozs.5,305,000 ozs.
True All-in Cost (TAIC) $1,413/oz.$1,429/oz.
Gross Revenue$8,425,200,000$9,018,500,000
Refinery Costs($15,763,000)x
JAAC Royalty($64,425,000)x
Gross Income$8,345,012,000$9,018,500,000
Total Operating Costs($3,122,004,000)($3,422,467,700) [Inclusive of JAAC Royalty and Refining Cost)]
Operating Profit (EBITDA)$5,223,008,000$5,596,032,300
NT Royalty($1,044,601,000)($1,119,206,460)
Income Tax($1,566,902,400)($1,678,809,690)
Total Capital Costs($1,191,290,000)($1,361,888,000)
Net Income$1,420,214,600$1,436,128,150
Net Profit Margin17%16%
Absolute Cost Structure (ACS)83%84%
True Value$14.13/sh.$14.29/sh.
Cash Flow Multiple5x5x
Annual Cash Flow$109,413,297$110,588,867
Future Market Cap$547,066,485$552,944,335
Future Market Cap Growth580%571%
Target$5.44/sh.$5.50/sh.

Notes: All Values in U.S. Dollars

$VNNHF : Belo Sun Mining — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au
Flagship ProjectVolta Grande
Mineral Reserves3,788,000 ozs.
Shares Outstanding442,631,915
Market Cap$84,100,064
Average Annual Production205,155 ozs.
Recovery93.1%
LoM17.2 Years
Payable Product3,524,100 ozs.
True All-in Cost (TAIC) $900/oz.
Gross Revenue$5,990,970,000
CFEM Royalty($42,240,000)
Gross Income$5,948,730,000
Total Operating Costs($2,488,640,000)
Operating Profit$3,460,090,000
Income Tax($155,060,400)
Total Capital Costs($486,086,900)
Net Income$2,818,942,700
Net Profit Margin47%
Absolute Cost Structure (ACS)53%
True Value$6.37/sh.
Cash Flow Multiple5x
Annual Cash Flow$164,124,000
Future Market Cap$820,620,000
Future Market Cap Growth876%
Target$1.85/sh.

Notes: All Values in U.S. Dollars

$AAU : Almaden Minerals — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au & $24/oz. Ag
Flagship ProjectIxtaca
Mineral Reserves2,589,245 AuEq ozs.
Shares Outstanding111,700,000
Market Cap$73,722,000
Average Annual Production208,171 AuEq ozs.
Recovery93%
LoM11 Years
Payable Product1,840,664 AuEq ozs.
True All-in Cost (TAIC) $1,255/oz.
Gross Revenue$3,129,128,000
Almadex NSR($62,582,560)
Gross Income$3,066,545,440
Total Operating Costs($1,283,000,000)
Operating Profit$1,783,545,440
Extraordinary Mining Duty($8,917,727)
Special Mining Duty($133,765,908)
Income Tax($535,063,632)
Total Capital Costs($286,000,000)
Net Income$819,798,173
Net Profit Margin26%
Absolute Cost Structure (ACS)74%
True Value$7.34/sh.
Cash Flow Multiple5x
Annual Cash Flow$92,636,095
Future Market Cap$463,180,475
Future Market Cap Growth528%
Target$4.15/sh.

Notes: All Values in U.S. Dollars