HGO 1.96% 5.2¢ hillgrove resources limited

kanmantoo project jv -- number crunching

  1. 18 Posts.
    As the Kanmantoo project JV to be announced soon, it is of greate curiosity to crunch the numbers and try to make an educated guess/estimation on the JV partner's expected contribution.

    Here are some numbers abou the project size:

    1. $130M:

    The media is quoting $130 million (AAP Dec 18: South Australia's Treasurer Kevin Foley has given the green light for a new $130 million copper-gold mine to be built in the state. ).

    I guess here the $130M is the COST ($31.6M for assest, and $98M for capex.)

    2. $250M:

    The Evans and Partners Stock Watch gave a 57cps VALUATION to the project, translate to about $250M (435.4 M shares full dilluted).

    3. JV contributions:

    Assume a 50/50 JV partnership.

    The best scenario would be the JV partner contributing $100M for the CapEx, and plus about $30M borrowed (by both parties) for OpEx. In this case, HGO has no effective cash out, and will be paid back on some CapEx by HGO. This scenario values the project for $200M+.

    The most likely scenario, as I discussed earlier, would be the JV partner contributing about $75M for the CapEx. The balance borrowed from the the bankers. This scenario values the project for about $150M.

    The worst case scenario would be the JV partner only contributing $50M, the balance borrowed by HGO and/or the JV partners from the bankers. This scenario values the project for $100M+ only.

    What do you guys think?

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