Hi everyone.
I've been re-thinking what we may have here.
Just a "Back of the Envelope", so don't take this estimate seriously. Wait for DOC to come out with his full valuation report. The following is a "just for the fun of it" exercise. Surmising that Medinah gets a payout of $90M over the next 3 years ... which represents 5 M tons of ore, and that on average, a porphyry of this type averages 500 M tons, what value do we attach? Roughly, this may represent a cash payout of $2 Billion (based linearly on the original $180M upfront tranches), and that $2 Billion figure is conservative. I use only 1/2 the average percentages already drilled and indicated at attaining the $2 Billion figure. (For simplicity, I’ll assume the homogeneity typical of porphyry deposits, but cut it to 1/2.) Now, surmising full value won't be "proven up" in the first 18,000 meters of drilling ... but say, may take the next 20-30 years, and the upfront cash payout is actually linear... (and rate of payout is every 3 years as re-evaluation occurs). So how would this $2 Billion be paid out? Again rough estimate, if paid out evenly in three year tranches, this represents an additional $200-300 M upfront cash payout every 3 years. Forget that 2 porphyries are indicated on the property, and may actually double this periodic cash payment amount for just the Alto. Now, figure in the 15% "free-carried" interest in the Alto properties, and all production thereafter. Let’s say the total valuation eventually comes in at 50 times the present $2.2 billion, a very conservative figure. What is the cash value to Medinah and it’s shareholders over the next 27 years? Once full production gets underway, imagine an additional $250-325 M to the balance sheet from smelting revenues each year. Note, Medinahs's other properties aren't valuated in the preceding yet either. LDM should provide another additional boost. Ciclon1 and 2, Polo, Poniente, Oriente and Sur? OK, so I'm not going to give an actual estimate of anything we shareholders might expect, but it sure is looking more like an investment than a crapshoot! lol
So, now my real question(s) is what share price will MDMN need to attain for each of us to comfortably retire, and when will it get there? I'd love to hear some expectations from shareholders. Really! What multiple will be applied to PPS for the 15% (7 1/2% for US) carried interest as years go by and cash flows in? Will future 10% stock dividends be dispersed annually following the April 2 dividend this year? Will they be more frequent than annually, and at what point will cash dividends be considered and dispersed to shareholders? For now, I'll gladly take a 10% stock dividend this year while I await my target price to be reached, which should easily be attainable for me based on the foregoing rough estimates coming to fruition. Any and all future dividend payouts, while valuation is proven up and increased, is just icing on the cake! I do look forward to retiring quite "soon", or at least in a few short years! :-)
As I said, just having fun here. lol
