Great News with Dunleavy win and BM1 Defeated-we'r
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Posted On: 11/13/2018 7:23:59 AM
Great News with Dunleavy win and BM1 Defeated-we're still in
1. As all know now, Dunleavy winning was a very material win for NAK. State permits are needed and having a very pro mining Governor and GOP Governor at that, in office only bodes well for us.
2. BM1 (stand for salmon) was defeated resoundingly by Alaskans 2-1 rejection of that nonsense. This is good for a number of reasons. 1) Clearly it removes a key risk for us 2) It really proves most Alaskans were/are not against Pebble, indeed a strong majority are clearly FOR Pebble and it simply shows outside interests were indeed spreading the misinformation (looking at you NRDC and China and uneducated / ignorant Washington State fishermen)
3. Draft EIS due 2nd week of January - we expect this to be a material event. With this stock we no longer try to call 'catalysts' as there is so much gaming going on, but we do care about material events that de-risk this from a partner or buy out perspective. 2 of those key events have happened with 1 and 2 above, a clean Draft EIS pretty much guarantees a permit as these things are usually only adjusted at the margin. Should that happen, the 'true value' of this company should start appearing as institutions get in, and bidders line up to partner or buy the company out given the resource. Remember, Ron T stated he felt the company would be bought out shortly after th Draft EIS, and that Cu prices should see material moves upwards in 2019 and supply issues start to hit.
4. We see the company has 28 mil in cash and short term investments, as of Sept 30, this is good, as the ACOE has now done the heavy lifting on the draft EIS and as such, we should be good cash wise for another 2 quarters, and by then the value of the company should be materially higher (already should be much higher but is what it is). Cash burn will clearly slow as the AcOE is wrapping up the 'heavy' lifting so to speak. We will need a partner, funding or a buyout by Q2 in our view but the draft eis should push that value higher with any partner. Our guess is the company will wait the 1.5 months to leverage that document into a higher valuation from partners, since we have the cash.
As has been stated in the past, a number of factors can increase our ‘relative value’ and thus price target in the short term
NAK will be the only “pure play” public vehicle with access to Pebble only – largest Cu / Au deposit in the world
Most are now aware of what is going on in the Cu market and dynamics/sentiment in that regard – the market is finally seeing that Cu demand is only going to increase over time given a lack of supply and material new demand from electric vehicles, electronics, global urbanization and related infrastructure needs, etc.
A strong consortium valuation clearly affirms a bullish view on the value of Cu long term.
Deals done in the private market are usually at a 15-20% discount to fair value given illiquidity, lack of control (especially if multiple partners), and as a ‘sweetener’ to potential partners. Therefore, the market could value NAK’s 50% ownership higher
1. As all know now, Dunleavy winning was a very material win for NAK. State permits are needed and having a very pro mining Governor and GOP Governor at that, in office only bodes well for us.
2. BM1 (stand for salmon) was defeated resoundingly by Alaskans 2-1 rejection of that nonsense. This is good for a number of reasons. 1) Clearly it removes a key risk for us 2) It really proves most Alaskans were/are not against Pebble, indeed a strong majority are clearly FOR Pebble and it simply shows outside interests were indeed spreading the misinformation (looking at you NRDC and China and uneducated / ignorant Washington State fishermen)
3. Draft EIS due 2nd week of January - we expect this to be a material event. With this stock we no longer try to call 'catalysts' as there is so much gaming going on, but we do care about material events that de-risk this from a partner or buy out perspective. 2 of those key events have happened with 1 and 2 above, a clean Draft EIS pretty much guarantees a permit as these things are usually only adjusted at the margin. Should that happen, the 'true value' of this company should start appearing as institutions get in, and bidders line up to partner or buy the company out given the resource. Remember, Ron T stated he felt the company would be bought out shortly after th Draft EIS, and that Cu prices should see material moves upwards in 2019 and supply issues start to hit.
4. We see the company has 28 mil in cash and short term investments, as of Sept 30, this is good, as the ACOE has now done the heavy lifting on the draft EIS and as such, we should be good cash wise for another 2 quarters, and by then the value of the company should be materially higher (already should be much higher but is what it is). Cash burn will clearly slow as the AcOE is wrapping up the 'heavy' lifting so to speak. We will need a partner, funding or a buyout by Q2 in our view but the draft eis should push that value higher with any partner. Our guess is the company will wait the 1.5 months to leverage that document into a higher valuation from partners, since we have the cash.
As has been stated in the past, a number of factors can increase our ‘relative value’ and thus price target in the short term
NAK will be the only “pure play” public vehicle with access to Pebble only – largest Cu / Au deposit in the world
Most are now aware of what is going on in the Cu market and dynamics/sentiment in that regard – the market is finally seeing that Cu demand is only going to increase over time given a lack of supply and material new demand from electric vehicles, electronics, global urbanization and related infrastructure needs, etc.
A strong consortium valuation clearly affirms a bullish view on the value of Cu long term.
Deals done in the private market are usually at a 15-20% discount to fair value given illiquidity, lack of control (especially if multiple partners), and as a ‘sweetener’ to potential partners. Therefore, the market could value NAK’s 50% ownership higher
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