Fission Uranium: FCM Advanced Resource Stock Valuation

Flagship Property: Triple R = 100% Ownership

Location: Saskatchewan

Market Cap = US $255,440,979

Resource Base = 102,470,000 lbs. U308 (FCM post-PFS Resource Upgrade Estimate)

Share Structure = 532,168,707

Market Cap Valuation Per Resource Lb.

= US $2.49 Market Cap value per lb.

In other words, each lb. in the ground is valued at US $2.49 by Market Cap.

Share Price Valuation by Resources in the Ground

= .19 lbs.

In other words, each share represents .19 lbs. of U308 and each share represents US $5.00 worth of U308.

Resource Valuation as a Percentage of Market Cap

  • Market Cap = US $255,440,979
  • Value of Resources = US $2,664,220,000

The Market Cap is valued at 10% of the resources in the ground. There is room for significant Market Cap growth.

After-tax IRR (@ US $65/lb. U308) = 34.2%

NPV/CapEx = 93%

  • NPV = US $774,928,782
  • CapEx = US $835,707,510

Rough Market Cap Valuation

  • Value of Resources = US $2,664,220,000
  • Value of Resources at 15% = US $399,633,000

The current valuation (US $255,440,979) is lower than the Market Cap valuation based upon the present Value of Resources at 15%.

Near Future Cash Flow Multiple @ $26/lb U308 = 1.6

  • Near Future Cash Flow = US $155,740,000

In other words, with a Near Future Cash Flow Multiple of 1.6, Fission Uranium should be worth US $408,705,566 at $26/lb. U308.

Future Cash Flow = US $662,740,000

Fission Uranium’s Future Cash Flow is ~2.6 times its present Market Cap.

Cost Structure = 22%

Debt = 0 Debt

Future Market Cap @ US $65/lb. U308 = US $999,082,500 … Unrated

Future Market Cap Growth = 291%

Conclusion

Recently, 9 PFS resource upgrade holes targeting the R780E zone intersected wide, high-grade mineralization. Consequently, Fission Uranium’s upcoming PFS will likely reflect an updated resource base of no fewer than 102 Mlbs. U308 (M&I).  As the fundamental picture has changed for Fission, so has our price target: US $1.80

The Investment Case for Gold Mining Inc.

F/D Market Cap = US $113,338,301

Resources = 12,370,000 AuEq

Market Cap Valuation by Resource Ounce = $9.16

In other words, each AuEq oz in the ground is valued at US $9.12 by fully-diluted Market Cap.

Share Price Valuation by Resources in the Ground = .08

In other words, each share represents .08 AuEq ozs of resources. Each share represents US $100 worth of AuEq in the ground.

Resource Valuation as a Percentage of Market Cap = .8%

  • Value of Resources = US $15,462,500,000

In other words, Gold Mining’s Market Cap is valued at less than 1% of the value of the AuEq resources in the ground. This is very low. There is room for substantial Market Cap growth.

Future Market Cap @ $1,400/oz = US $1,731,800,000

Future Market Cap Growth = 1,428%

Conclusion

Gold Mining is a unique optionality investment vehicle with which to play a revaluation of both gold and uranium. Its aggregated resource base is large, its grades are fair-to-good, and its Market Cap has dropped into deep value territory.

Gold Mining’s 75% interest in the 125,000 Ha Rea uranium project is a bonus. Rea’s permits surround Orano’s high-grade Maybelle uranium deposit, discovered by Uranerz in 1988 (drill intersections have returned up to 21% U3O8 at Maybelle).

We are buyers of Gold Mining at present levels and intend to make additional purchases should shares experience further weakness.

Corporate Presentation

GoldQuest Mining: Developer in the Doldrums

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

= 1.4%

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

Conclusion

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.

Score

7/11