$OGLDF : Otis Gold — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au
Flagship ProjectKilgore
Ownership100% (Royalty-Free)
Indicated Resource825K ozs.
Shares Outstanding175M
Market Cap$12,057,500
Average Annual Production111,700 ozs.
RecoveryCrush: 82%/ROM: 50%
Payable Product558,700 ozs.
LoM5 Years
True All-in Costs (TAIC)$1,239/oz.
Gross Revenue$949,790,000
Total Operating Costs ($435,570,000)
Operating Cash Flow (EBITDA)$514,220,000
Income Taxes($159,408,200)
Total Capital Costs($97,460,000)
Net Income$257,351,800
Net Profit Margin27%
Absolute Cost Structure (ACS)73%
MTQ Score (Higher is Better)0.4
True Value$1.47/sh.
True Value Discount (TVD)95%
Cash Flow Multiple5x
Average Net Annual Cash Flow$51,493,700
Future Market Cap$257,468,500
Future Market Cap Growth2,035%

Notes: All Values in U.S. Dollars

The kind of arrangements about which we daydream don’t happen too often, but there’s no practical reason why some of them couldn’t. For instance, we’d like to see an Otis/Bullfrog business combination.

I try to avoid as much modernist lingo as possible, including the catchword, ‘synergy.’ Which is to say, I don’t necessarily think an Otis/Bullfrog business combination would necessarily prove ‘synergistic.’ Rather, a single entity could better benefit from an economy of scale, enabling it to quickly fund additional inorganic growth.

I have also imagined an interesting three-way merger: Otis + Bullfrog + Paramount.


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