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By Dennis Boyko
Created on: March 22, 2010
Current version 0.11: April 8, 2010 -- added a chart symbol key.
Metrics have been updated with closing prices available on 2012-Feb-07.
Projected fair market stock price for Mountain Boy Minerals Ltd., based on the current NI 43-101 resource disclosures, is C$-0.03. The actual closing stock price was C$0.11.
At the close of trading on and based on NI 43-101 reports available in March 2010, the current and projected Market Capitalization per ounce of Gold Equivalent for Mountain Boy Minerals Ltd., were:
current market valuation: US$35.83 per ounce of Au Eq.
projected fair market valuation as a gold producer: US$106.23 per ounce of Au Eq.
Mountain Boy Minerals Ltd. in situ metal value is 83.1% from gold and 10.9% from silver. Therefore Mountain Boy Minerals Ltd. is valued at 90% of the Gold Producer Valuation Line.
The average ore value per tonne was US$61.66.
Projected fair market stock price for Mountain Boy Minerals Ltd. is derived using the projected fair market valuation of US$106.23 per ounce of Au Eq (as derived above) and the following assumptions:
Capital Expenditure for mine development: US$40M -- this is a very rough estimate of 20% of the capital costs required to bring the Silver Coin property into production. The ownership of 20% occurs when the joint venture partner meets exploration spending targets and once hit, the company is not liable for any further exploration costs.
Risk Premium: 20% applied to the capital expenditure,
Discount Factor: 20% -- set to account for the gap before the deposit can be moved into production. This discount accounts for the resource loss from the mining plan, ore processing losses, and like factors as well as the time discount between now and the future start of production.
The discounting of the future gold metal prices after the start of production is already fully accounted for in the Gold Producer Valuation Line which is derived from current day market prices and company fundamentals from a number of established gold producers.
The supporting model and the calculations used to produce the projected fair market stock price are detailed in Fair Market Price Calculations.
This blog does not assign any value to potential for organic growth on current Mountain Boy Minerals Ltd. properties. Quoting from the MD&A for the period ending August 31, 2009:
Silver Coin is a significant gold resource which has yet to be fully delimited by drilling. Potential to significantly expand the resource exists with depth, and along strike, particularly to the north. It is located in a district which contains widespread and abundant alteration and mineralized prospects, including one of B.C.'s most important past-producers, the Silbak-Premier mine.
Other Mountain Boy Minerals Ltd. properties, to which this blog does not assign any value, include:
Barbara Property (BA): The BA property is a silver-base metals property located about 30 kilometres east of Stewart, British Columbia in the Skeena Mining Division. The property is 3 kilometres south of a power line and paved Highway 37A. Mountain Boy holds a 100% interest in the BA claims. [Company share is assumed to be 30% based on Mountain Boy Minerals Ltd. Announces Closing of Non-Brokered Private Placement, a March 3, 2010 news release.]
Red Cliff Property: The Red Cliff property is a gold/copper property consisting of eight mineral claims located in the Skeena Mining Division of, British Columbia. Seven known zones of copper-gold and/or gold mineralization occur on the property.
Dunwell: A property with bonanza grade drill reported in High Grade Gold and Silver in Dunwell Drill Results, a February 4, 2010 news release.
The complete list of current projects is available at the company's PROJECTS web page.
Gold Key:
AEM
| AND
| AUQ
| G
| K
| RIO
| TVI
| YRI
Place mouse over each key symbol to read graph values.
If the key symbol is shown in bold, click to view the GoldMinerPulse valuation blog
for that company.
For the chart above, Mountain Boy Minerals Ltd. has an average ore value per tonne (y axis) of US$61.66 and a Market Capitalization per ounce of Gold Equivalent of US$35.83.
The Gold Explorer-Producer Valuation Hypothesis is based on the data driven observation that a company's market capitalization per ounce of gold equivalent tends to rise based on the current valuation of the metals contained in an average tonne of ore. For developer/explorers, it is also assumed that the true Explorer-Producer Gap should be large enough (but no larger) to cover the expected future capital expenditures, risk premiums and time discounts.
The original motivation for the Gold Explorer-Producer Valuation Chart was developed in Junior Gold Explorer Valuation Observations. Application steps and the generic factors that need to be considered in applying this valuation method are further described in Gold Explorer-Producer Valuation Exceptions.
This blog is based on the stock fundamentals and current metal prices as documented in the Mountain Boy Minerals Metal Valuation Report.
The Gold Explorer-Producer Valuation chart is updated after the close of trading using closing stock prices, closing spot market metal prices, fully diluted share counts, and NI 43-101 resource and reserve disclosures.
Last update was for the market close on 2012-Feb-07.
This GoldMinerPulse blog is presented for the sole purpose of illustrating how GoldMinerPulse per company metrics may be useful in judging valuation of individual gold and silver mining stocks. This blog should not be considered as investment advise. Anyone using this blog should become familar with the GoldMinerPulse metrics and the underlying assumptions to access their usefulness.
Mountain Boy Minerals web site.
Mountain Boy Minerals NI 43-101 Metal Valuation Report for the company metrics derived using the last close of trading data.
Canadian Insiders for insider trades on the TSX
Mountain Boy Minerals Message Boards: StockHouse
StockCharts.com for price charts.
Sedar for all TSX regulator filings. Sorry but you'll have to navigate the Sedar site as they do not allow direct links to company specific lists of document filings.
I have listed the best of links for anyone interested in researching Mountain Boy Minerals Ltd. further. If you have a blog or site withMountain Boy Minerals Ltd. specific pages, please send me the link for review and I will include your work in the link section as appropriate.
Got comments? Questions? Please Talk Back.
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