Landore Resources Investors - LND

Landore Resources Investors - LND

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Stock Name Stock Symbol Market Stock Type
Landore Resources Limited LND London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 29.00 08:00:00
Open Price Low Price High Price Close Price Previous Close
29.00 29.00 29.00 29.00
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Top Investor Posts

sportbilly1976: Well that went down well. Looks like only the updated resource report will get the share price to rise...clearly investors want the gold M oz figure in black and white. Bill's presentation needs to be stellar
jmr_gold: An undervalued stock, is an undervalued stock. Price of Gold should have a rather limited impact here, the key thing is eyes on the stock. Its obvious this is a takeover paly and its going to go for a lot more than £33 million. Market cap too low to attract institutions, retail investors foolishly chasing companies with the best PR, rather than actual assets. Don't be fooled out of this.
lochlea: I think I am right in saying that the last Director purchase on the open market was at 16.5p ie post consolidation £3.30. £3.30........... beggars belief. I still think it's odd given valuations & potential that no institutional investor hasn't been hooked in (to buy on open market). After all, wasn't that a major justification for the share consolidation???
bygdennis: As we learn not to be spooked by the zero sells we'll bring a new confidence here! Folk buy to invest! As new potential investors see were not being drawn out we'll make good gains!!
bygdennis: We've got a good share here with much to offer investors! Research will confirm!! We'll move up no problem!!
bygdennis: We've been run over! or over run!! Not a good welcome for new investors! We'll come with wealth warning in future!! Won't be long!!
sophisticatedtrader: Surprised to see some selling today .... it's not every day you get a Bonanza gold find .... crazy times🤔 ... well it leaves more shares for the more savvy investors to buy. 🥳🎉💰🤩
burtond1: Time for @landore_plc to Land the Jackpot?"Fully-funded for its activities this year #LND has made significant progress the past few years. It's dual focus on #Gold and battery metals make it an interesting play for investors seeking multiple exposure"
robers98: 𝗣𝗿𝗲𝘀 0306;𝗻ҳ21;𝗮𝘁;𝗶𝗼𝗻 @landore_plc encourages shareholders and investors alike to view the new Company Presentation from February 2021 available on the website
richgit: As I have said - I followed Eric Sprott after doing a lot of research. The strong possibility that they may have the extra Gold that Mr Sprott believes (and others) could certainly propel this stock many times beyond its current Petty Cash Market Cap. 2 Men a shovel and a mere hoped Gold project will (in the months to come)be valued far more than this Mining Bug has summed it up quite succinctly... A low grade, low cost, simple open pit prospect. To date Landore has defined a NI43-101 compliant 1.015 million ounce gold resource within the Archean Greenbelt they are exploring. The grade is low; indicated resource is 747,000 contained gold at 1.06 g/t, and inferred resource is 268,000 at 0.91 g/t. But economics matter, and mineralisation is shallow, the metal is cheap to extract, with very strong metal recovery rates, limited reagent consumption, a simple processing path, and low capex and opex metallurgical results. This all favours a simple open pit mining operation akin to two other major producing 1 g/t projects in other parts of Ontario. The project has strong economics at $1400 gold and above. Gold today is $1900, but the project on the extended case of operation looks to get to a 30% IRR at about $1400 gold. The resource looks very likely to be big enough to support this. That is before the (fingers crossed) bigger resource and improved economics from the upcoming autumn/winter drilling campaign. The study from February 2019 showed the following at $1500 gold. A 39% post-tax IRR, a $203m post-tax NPV, on $94m of initial capex. At $1900 gold, the economics are magnified. An unquantified IRR (but I would guess 60%), and a post-tax NPV of $370m. This has been missed by external investors as it was shoved into a drilling programme RNS on September 1st. CEO: “in a position to push the resource towards a multi-million ounce gold resource..” Because Landore has been often cash strapped in the past, the Junior Lake property is not even close to being fully explored. The management team see a pathway towards doubling (or more) the gold resource base, making it ‘district scale’. There is upscaling potential from more exploration around the known resource….. The BAM gold deposit is 3.7km in strike at present, but it is open down dip and along strike east to west. Soil sampling done last year found widespread gold mineralisation along strike to the west for a further 7km. And there is upscaling potential from depth drilling….. Landore has only explored the depth down to a bit over 400 metres, and the PEA is only based on resource down to 230 metres. All of the main greenstone belts in North East Canada extend to depth. The road to materially increasing the resource is visible. What about the other assets? Nickel: The B4-7 deposit has 46,661 tonnes of contained Nickel equivalent. The VW Nickel-Copper deposit has an inferred 8,892 tonnes of Nickel equivalent. There is a broader aim to expanding this to over 100k tonnes but this is not the focus at the moment. But with Nickel, Copper and the PGM metals all enjoying a big price rebound, this could hold good value. I do not focus on this in my later valuation because it is early stage and it is not where money is being directed. Nevada properties: 8 properties that have barely been touched and that Landore has scarcely talked about. Strategy; Drill, Expand, Exit? Once an asset is good enough from an economic view, it is important that management have a strategy that does not involve major dilution for shareholders. The plan here is looking more and more clear. CEO Bill Humphries was MD at Brancote Holdings, a successful gold explorer that proved up a 3.8 million ounce gold resource, and flogged it on in a deal with Meridian gold after the turn of the century. The share price went up over 10 fold in this process. He also built up a resource at Patagonia Gold before becoming Landore CEO in 2015. He has been at the forefront of Landore’s gold discovery and progression. But Humphries is about 80 years old, the CFO is in his early 60s. What is the phrase Humphries continues to use? The fundraising puts the Company in a position to push the resource towards a multi-million ounce gold resource, whilst continuing to explore potential corporate transactions with a view to maximising shareholder value.“ Bill owns ~6% of the company, and Sprott owns about 10%. J.W. Hudlestone is also a major shareholder and has backed many a placing over the past few years. This ‘transaction’ message echoed by the recent Cenkos (broker) and Align (research) notes. All signs point towards an eventual corporate exit. My guess is that the road will be as follows, with a period of more and more newsflow and corporate promotion. Autumn/winter drilling programme to kick off within 4 or so weeks. Will include 7.5km of infill and extension drilling, 3km for depth potential testing, and 3.5km for exploration targets. A 14km programme in total to complete March 2021. This should provide steady news flow An updated resource estimate and PEA/scoping study economic framework following the drilling Possible bulk sampling study to commence during 2021 Align has touted that a final investment decision could be taken in 2021 As Cenkos wrote, “So far Landore has shown it has a very low discovery cost per ounce (US$8.47 per ounce gold discovered) and a high drilling success rate (22.2 ounces of gold for every metre drilled on the BAM Zone) due to the consistency of the mineralisation and so we feel the chances for BAM to keep growing is good with possible further upside from additional targets on the structure. With such a solid growth potential and a significant land holding over 31km of greenstone belt Landore could be in a strong position to attract industry interest in the project and company overall.” or as Align wrote, “A dramatic increase in resources at the BAM Gold Project looks to be on the cards as management attempt to grow shareholder value by teasing out the top take out price from pursuing a corporate transaction.” Brokers do not write this stuff on the fly. This must be the loose messaging directly from the board. On the contingency that drilling results are good, the signs in my eyes point towards a corporate exit transaction in late 2021, aiming to maximise value a la the Brancote precedent. That’s all great, but it does not matter if the stock isn’t cheap. Good news, nothing is priced in. First let us nail down the valuation of the company right now. It is at a £16.9m market cap, with £2.6m net cash on hand from the last raise. That gives an enterprise value of £14.3m. However there are warrants outstanding from the Sprott placing, at 20p. We are below that level, but if one believes these will be exercised, then the true market cap today is £21.4m. But those warrants when exercised will bring in cash to the company. £4.9m to be precise. That is nice, as I consider the warrants as almost definite to be exercised. The existing £2.6m cash funds the drill campaign and takes us through to July 2021 according to the company. The warrants would bring in another £4.9m. So if the warrants were exercised today, the company would have £7.4m cash in hand and the enterprise value and true value of the company would still be £14m. So it is not very distortionary and Sprott is not the sort of investor to flip a placing. There are many different valuation approaches to employ for an exploration company, but when existing economic studies are in place, life is made easier. The challenge becomes less about extrapolating grades, resource size, and location (guessing infrastructure costs et cetera), and it is more about scrutinising the economic studies. What does the NPV look like, what is the assumed metal price, what is the discount rate, how much capex, what are the contingencies et cetera. What I want to see is a reasonable metal/mineral price assumption, at least a 25% IRR (but normally 30%+), hopefully a capex tag that is not too big, and a big post-tax NPV compared to the market capitalisation. A liquid metal/mineral small cap comparison. I utilise my own approach this time around to compare economic study data against other small cap UK miners. I discount companies operating with metals and minerals with low liquidity (like Lithium or Vanadium) as projects can often alter global supply/demand dynamics and therefore pricing. All said and done, I am looking at Enterprise Value/Net present value, accounting for the IRRs and metal price assumptions. I recommend you zoom in on the table underneath. MiningBug analysis. UK listed miner project economics. Landore stands out At spot prices, Landore trades at only 5% of its extended case NPV. There are a couple of other projects with this same ratio, but their IRRs are more marginal, and rely on metal/mineral prices above spot levels. More important than they, they are huge projects with massive capex price tags, that will rely a big funding package. Landore’s study uses a 5% discount rate; I wouldn’t want to go lower but this is typical of Canadian projects and for this purpose it is fine as most Africa projects in this list are at 8-10%. A 5 point differential is what I want to use for jurisdictional comparison. For a low capex project with a strong IRR, Landore’s 5% ratio is very low compared to most others let alone a Canadian project. If you are less bullish than me on the gold price and think it will fall back it is important you can be comfortable at a lower metal price. If you assume a $1500 gold price, the ratio is still only 9%. Reversing the equation, a ratio of 20% EV/NPV implies investors are only discounting a NPV on the project of $93m (vs. $370m at spot gold, extended case), and that is before the new drilling campaign kicks off. If I apply different higher ratios than 20% the implied target share price levels are as underneath, and yes, they are much higher valuations. I prefer to be cautious in my assumptions and pin my target valuation off a 20% ratio, or 66p a share. That is still over 250% upside. Does that make sense? With miners, I always prefer to strike valuation targets off real market valuations. I square my own valuation method to a variety of other pre-production mining valuation methods used by Cenkos and Align. Cenkos illustrate several valuation methods. Of the ones they use, the approach I think is rigorous is their analysis of 100 global junior pre-reserve gold miners. They calculated the average $ value per total gold resource ounces, and also calculated the $ value per measured or indicated (M&I) ounce. They found that the valuation ratios are $75/ total resource ounce, and $161 per total M&I ounce. Applying the total resource method to Landore ironically gets to a 65p valuation, very similar to my own. A whole range of valuation methods are shown underneath. There is no right approach to valuing pre-production miners, but when a variety of market based methods imply major upside, that gives me additional comfort in what I am independently calculating. SUMMARY: In a world where gold is above $1400 (and especially at $1900), Landore’s asset is transformed. Landore already has a 1 million ounce resource at Junior Lake, and the low cost extraction lends the asset to an open pit mining style. The company is valued at 5% of the extended case post-tax NPV at spot gold, a fraction of most junior miners, despite operating in one of the best mining jurisdictions, with significant resource expansion potential at depth and along strike. With the financial backing of Sprott, and talk of evaluating corporate transactions to maximise shareholder value, I expect the rest of 2020 and 2021 to be very interesting for investors. Cheap, and long ignored, Canadian gold, that I think will be firmly on investors map before long. IMHO
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