||EPS - Basic
||Market Cap (m)
Real-Time news about Novo-N.Dkk2'b' (London Stock Exchange): 0 recent articles
|energyi: GoldEditor.com: Gold Newsletter says Northern Orion trading at a discount
Brien Lundin's Gold Newsletter has talked about mining and exploration companies for 30 years - his longevity is a testament to his stock-picking abilities. So, when be brought Northern Orion (NNO-TSX) to our attention, we listened. In his latest update to subscribers, he explains how the company is trading at a deep discount to its net asset value. Few public companies have discounts in their increasingly energized mining investment market. Both copper and gold prices are on the rise over the last 6 weeks. We include his excerpt below:
NORTHERN ORION EXPLORATIONS
(NNO.T) (604-689-9663) ... www.northernorion.com
Northern Orion is another situation in which substantial value has been largely overlooked by the market.In this case, however, that value is going to be thrust into the market's figurative face in the form of huge cash flow. Since our last update, the company has completed the acquisition of a 12.5% interest in the massive Alumbrera copper-gold mine in Argentina and has also closed the financing to fund that deal. In addition, the share capital has been consolidated on a 10-for-one basis.
You may remember from our June issue that Wheaton River (WRM.T), which has some common shareholders with Northern Orion (including Endeavour Mining Capital (EDV. TSXV), holds a 37.5% interest in Alumbrera. Northern Orion also holds 100% of the Agua Rica deposit, a similar, large porphyry copper-gold deposit located only 34 kilometers away from Alumbrera. Investors have been waiting patiently for the blockbuster announcement that Agua Rica will be developed in conjunction with the existing Alumbrera operation. I fully expect that announcement - but only in due course.
While waiting for that big news, people are missing the extremely strong fundamentals of Northern Orion's investment in Alumbrera. Expansion and productivity improvements at that huge operation in 2001 brought costs down to a level that ranked the mine among the largest and most efficient copper-gold mines in the world. Last year's sharp devaluation of the Argentine peso helped bring the cost down even further. Projections for this year show Alumbrera producing copper (net of the gold byproduct credits) at a cost of negative $0.05 per pound. Based on the 2003 projection of more than 400 million pounds of copper, Northern Orion is trading at only three times operating cash flow. Other copper companies are trading at roughly six times cash flow. In other words, Northern Orion is valued at only half of the value of other copper companies, giving credit for only its interest in Alumbrera.
So investors in Northern Orion get a company that should double in price to reach the value of its peers... plus a 100% interest in a second world-class project essentially for free. What more could you ask for?
Northern Orion Explorations
Recent Share Price: ..................C$1.58
Stop Loss: ...........................C$1.27
Shares Outstanding: .................113 million
Market Cap: .....................C$178.5 million
Shares Outstanding Fully Diluted: ...157 million
Market Cap Fully Diluted: .........C$248 million|
Novo-N.Dkk2'b' share price data is direct from the London Stock Exchange