WEZ westonia mines limited

- for b2

  1. 3,800 Posts.
    Hi B2,

    Over easter I had a look at WEZ. Doesn't look too bad. They come across as a professional crowd building up a good project. I ran a simple model on their financial projections and came up with a project NPV between $30m and $40m (the difference in valuations is opcosts - I did two scenarios using $300/oz and $350/oz).

    This compares ok to their their current market cap of $20m approx. I think todays share price is a good market valuation considering they havent yet completed a bankable feasibility.

    Some upsides to my valuation are:

    1. They talk of negotiating on a secondhand process plant - this may improve the valuation by $5m perhaps.

    2. I have not put any value in for their underground deeps project, which so far looks pretty promising with some solid drill intersections. Widths and grades appear strong enough to support underground mining in my view.

    Probably the biggest plus for the project is the seven year mine life. I am sure this will attract the instos.

    WEZ still has some hoops to jump. Complete the feasibility and get some finance. Completion of these steps should boost the share price further.

    However watch out for a future placement even though they are well cashed up at the moment. The odds that financing the project development will include an equity raising is pretty high.

    Overall looks like a low risk gold stock with potential to at least double over the next 12 to 18 months.

    All my own views. Take it as you may.


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