| Long-term Price Case | $24/oz. Ag & $1,700/oz. Au |
| Flagship Project | Diablillos |
| Ownership | 50% |
| Mineral Resources | 66,425,000 AgEq ozs. |
| Shares Outstanding | 224M |
| Market Cap | $8,736,000 |
| Average Annual Production | 4,919,765 AgEq ozs. |
| Recovery | 59% |
| Payable Product | 39,358,121 AgEq ozs. |
| LoM | 8 Years |
| True All-in Cost (TAIC) | $17.59/oz. |
| Gross Revenue | $944,594,904 |
| Total Charges | ($28,337,847 ) |
| Royalty NSR | ($9,445,949) |
| Net Revenue | $906,811,108 |
| Total Operating Costs | ($279,674,860) |
| Operating Profit | $627,136,248 |
| Income Taxes | ($219,497,687) |
| Total Capital Costs | ($155,479,000) |
| Net Income | $252,159,561 |
| Net Profit Margin | 27% |
| Absolute Cost Structure (ACS) | 73% |
| MTQ Score (Higher is Better) | 0.4 |
| True Value | $1.13/sh. |
| True Value Discount (TVD) | 96% |
| Cash Flow Multiple | 5x |
| Net Annual Cash Flow | $31,535,694 |
| Future Market Cap | $157,678,470 |
| Future Market Cap Growth | 4,280% |
| Target | $0.71/sh. |
Notes: All Values in U.S. Dollars
According to our calculations, the AbraPlata story gets interesting above $17/oz. Ag. If Aethon has a breakthrough and is able to demonstrate that recoveries above 80% may be achieved, the AbraPlata story could get interesting below $17/oz. It’s a wait-see.
The Net Profit Margin and Absolute Cost Structure are middling, so we have assigned AbraPlata a 5x Cash Flow Multiple and Future Market Cap Growth up to 4,280%.
Merger Update: 30 July 2019 — Jane pays John to take her to prom…
On a fully-diluted in-the-money basis, AbraPlata shareholders will own ~48% of Diablillos following a business combination with Aethon.
As our assumptions were within a +/- 5% margin of error (+4%) regarding future ownership, our existing valuation dated 20 June 2019 remains valid, for all intents and purposes.
