$LRTNF : Pure Gold Mining — FCM Independent Stock Valuation Analysis

Base Case = $1,400
Flagship Project = Madsen, Red Lake, Ontario, Canada
Fully Diluted Shares = 289,300,000
Fully Diluted Market Cap (25 March 2019) = U.S. $127,292,000
Resource Base (Probable Reserves: Madsen) = 1 Mozs
Resource Base (Indicated Resource: Madsen+) = 2,060,000 ozs
Head Grade = 9.0 g/t
LOM = 12 Years
Average Annual Production = 90,000 ozs
AISC = U.S. $787/oz
CapEx = U.S. $70,807,804
Capital Intensity = U.S. $71/oz
Cost Structure = 60%

Market Cap Valuation per Probable Resource Ounce = U.S. $127/oz
Market Cap Valuation per Indicated Resource Ounce = U.S. $62/oz

90% and 95% discounts respectively to spot gold. The valuation of Pure Gold’s Resources (Inclusive of Reserves) is still fairly low (U.S. $62/oz). At higher gold prices ($1,400+), considerable appreciation of value is possible.

Share Price Valuation by Resources in the Ground (Indicated) = 0.007 ozs

Were there fewer shares or more ounces, Pure Gold would be valued higher, but keep in mind the spectacular grade of Madsen, as well as the relative unimportance of this metric.

Resource Valuation as a Percentage of Market Cap (Indicated) = 5%

The Market Cap is valued at ~5% of the the value of the resources in the ground. This is low and bodes well for Pure Gold’s Market Cap growth.

Discount to After-Tax NPV @ $1,400 = ~60%
NET Cash Flow (LOM) = U.S. $591,232,196
Future Cash Flow Multiple = 4.6
Future Market Cap Growth = 364%
Projected Market Cap = U.S. $590,172,000

Proprietary Stock Valuations

Projected Book Value per Share = U.S. $2.04/sh.
PMCV15 = U.S. $1.49/sh.
PMCV10 = U.S. $1.00/sh.
TAC (Reserves) = U.S. $985,000,000 U.S. $3.33/sh.
TAC (Indicated) = U.S. $1,819,309,600 U.S. $6.15/sh.
TAC15 (Indicated) = U.S. $272,896,440 or U.S. $0.92/sh.

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