Flagship Property: Prairie Creek = 100% Ownership … 1 Point
Resource Base = 50,352,658 oz Ag (Includes Lemarchant, Boomerang & Long Lake) … 1 Point
F/D Share Structure = 280,433,387 … -1 Point
Recent Price = US $0.12
F/D Market Cap = US $33,652,006
After-tax IRR = 18.4% … -1 Point
NPV/CapEx = 67% … 1 Point
F/D Market Cap per Resource Ounce = $0.67 … 1 Point
In other words, each ounce in the ground is valued at $0.67 by market cap.
Share Price Valuation by Resources in the Ground
Each share is worth 0.18 Ag ounces in the ground. In other words, each share is worth $2.93 @ US $16.27/oz Ag. This is low. In an ideal world, Canadian Zinc would either have fewer shares or more resources. But this metric is not a deal-breaker, especially as this is not a primary silver producer.
Cost Structure = 92% … -1 Point
Cost Structure exceeds FCM’s ideal < 50% level, but this is a mine wherein Ag is a byproduct of primary Zn & Pb mining. Overall costs per tonne are not only competitive, but have successfully been reduced in the 2017 PFS by as much as 2.6%.
Resource Valuation as a Percentage of Market Cap
Value of Resources @ $16.27/oz Ag = US $819,237,746
In other words, the market cap is valued at 4% of the value of the Ag resources in the ground. This is low. There is room for substantial market cap growth.
Near-Term Cash Flow = US $2,667,000 … Unrated
Near-Term Cash Flow Multiple = 13x … 1 Point
Future Cash Flow @ $100/oz Ag = US $178,500,000 … Unrated
Debt Coverage = 0 Debt … 1 Point
Projected Future Market Cap = US $503,526,580 … Unrated
Projected Future Market Cap Growth Percentage = 1,396% … 1 Point
Location: Northwest Territories … 1 Point
We stalked Canadian Zinc for several years before we took our first stake in early June of 2018. Prairie Creek is fully permitted and most infrastructure is in place. Startup is expected to begin within 2.5 years of financing. The project economics are robust and the mine life is long, with considerable exploration potential. We have a target price of US $1.80 a share.
Flagship Project: 100% Ownership … 1 Point
After-tax IRR = > 20% … 1 Point
NPV/CapEx = > 1 … 1 Point
EV/Resources = < 1 … 1 Point
Cost Structure = < 50% … 1 Point
Resource Base = > 80 Mlbs. U308 … 1 Point
Future Cash Flow = Unrated
Future Cash Flow Multiple = > 5x … 1 Point
Share Structure = < 200 M … 1 Point
Debt Coverage = > 50% (or No Debt) … 1 Point
Projected Future Market Cap = Unrated
Projected Future Market Cap Growth Percentage = > 500% … 1 Point
Location: Friendly = 1 Point