Saturday, 10 November 2012

Gold Junior M&A Valuation Comparisons

A comparison of Prodigy and Galway acquisition valuation metrics by Danny Deadlock at Stockhouse.

I should put together a longer list and analysis of recent transactions.
Ultimately $/oz, though apparently simple is not a great metric. It doesn't make clear grade, and just adding a note of grade does not make clear depth, mining methods and capital requirements which drive value enormously.

NPV from PEA and PFS studies should make things clearer but Andina's example shows the degree to which financing / dilution risk holds back junior valuations even when the value should be higher. The judgement of practical mining teams will determine whether the PEA/PFS study is really achieveable.

This really should be offering companies like NGD ( see last post) great opportunities for accretive acquisitions where they bring cheap paper money from strong. momentum driven, share prices to good projects.
In a bull market, with cash available there is a great opportunity for revaluation.

Article link - Here

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