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Allied Nevada Gold Şirket Message Board

  • hardassetsrule hardassetsrule Jun 18, 2012 1:16 PM Flag

    Canaccord on ANV (part 2)

    Processing of precious metals laden carbon
    On June 7, 2012 Allied Nevada announced an agreement with Yukon-Nevada to process gold and silver laden carbon which had been stockpiled following the termination of a prior agreement with another facility. The company announced that the terms of the current agreement is in-line with previous arrangements, though no specifics were given. At the end of April, the company had 162 tons of carbon stockpiled, containing 13,300 oz of gold and 36,900 oz of silver. Under the agreement, the carbon currently in inventory will be processed within 90-120 days of signing the contract; the company has made its first shipment of carbon on June 12, 2012. The agreement includes a processing rate of between 15 and 30 tons per month; with Hycroft producing approximately 15-20 tons of carbon per month.

    The company will be active at both Hycroft minesite and several other Nevada projects in 2012. Our NAV ascribes a $270 million resource valuation to Hasbrouck (supported by DCF sensitivity applied to the NPV derived in the PEA) and a nominal valuation of $85 million ascribed to the balance of the exploration project portfolio.

    Hycroft - While the bulk of drilling on site is focused on condemnation work, some work is planned to convert a portion of in-pit inferred resources (298,000 Aueq oz heap leach and 1.361 Moz mill). Several regional targets on the greater Hycroft license this year include testing the West, Camel, Oscar, Chance and Rabbit targets.

    Hasbrouck - Drilling will continue to test for resource expansion at Hasbrouck, which hosts an inferred resource of 1.2 Moz gold and 29.3 Moz silver. The recently filed PEA study suggests there is an economic scenario to consider construction at Hasbrouck by late 2014, but management would likely only target development subject to at least a doubling of the current resource.

    Wildcat (1.1 Moz indicated and inferred) is an advanced exploration project that will see 25,500 ft of drilling targeting lateral expansion of the resource outline and initiation of a PEA study by year end. Pony Creek (1.5 Moz indicated and inferred) and Illipah are late stage exploration targets and Cortez is a key early stage exploration target.

    Our target remains unchanged at US$57.50 based on 0.75x our 5%/peak NAVPS estimate of US$76.81.

    The shares trade at a deep discount to our valuation, trading at 0.47x 5%/spot P/NAV vs. the junior average of 0.65x, and we continue to expect significant re-rating of the shares on execution of the accelerated heap leach and mill development at Hycroft. There is also takeover optionality given the size and strategic nature of the sulphide deposit and ANV’s position as the third-largest titleholder in Nevada.

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    P.S. I am also keen on jr miner ABI.V see related article here