The Goldman Sachs Group, Inc. (GS)

GRANX up 800% tomorrow.

GRÄNGESBERG EXPLORATION HOLDING

Equity Research | Grängesberg Exploration: Progress and project improvement against prolonged favorable macro backdrop (Emergers)

2022-08-10 08:00

As a result of the ongoing preparations of the DFS for Dannemora, GRANGEX now reports an upwards revision of the known and indicated mineral resources, following a reinterpretation of the drill cores, by 990 kT to 29,176 kT. Inferred resources are also increased by 125 kT of 36.6% iron. While this signals strength with regards to cost efficient project development and how modern mining methods can add value to old projects, it has marginal effect on our fair value, where we now find support for SEK 98-168 (95-163) per share in 12-24 months. However, with a structural long-term growth in demand for green CO2 free iron ore and a prolonged supply crisis following Russia’s cut off from Europe, macro developments continue to benefit both of GRANGEX’s projects, which along with continued operational progress should benefit a revaluation of the share.

Next step DFS for Apatite in Q3 and Dannemora in Q4
In the very last days of Q2’22, after some minor delays, GRANGEX submitted the environmental permit application to the Swedish Land and Environmental court for the restart of Dannemora to produce high grade iron ore. Now the next step is to finalize the Definitive Feasibility Study (DFS) for Dannemora which we expect before the year end. In total there are 18,000 meters of drill cores that have been tested, accounting for about 50% of the relevant cores, meaning that there are more cores to test, which could changes resource estimates, and our fair value, further.

With regards to the Apatite project we expect the submission of the environmental permit application already in Q3’22 along with the DFS. With the major financing round for these projects most likely during H1’23, we maintain our projection of production start for the Apatite project around winter ‘23/24 and production start in Dannemora around winter ‘24/25.

War in Ukraine continue to offer support to prices
Iron Ore prices have seen a slight pullback from the levels seen after Russia invaded Ukraine, but remain at 130+ USD per ton. Historically, Russia has accounted for over 20% of European imports of high grade iron ore and pellets, and with no quick solution in sight, this continues to lend support to our expectation of a continued expansion of the price premium for higher grades, such as the best in class 68% quality to be produced at Dannemora.

The war in Ukraine and subsequent trade restrictions have also continued to push prices of phosphate rock further, where prices have surged to now being closer to 300 USD/t. To be prudent, we include only a small portion of these price changes into our valuation model, but note that they provide a bright backdrop for the projects which enhances GRANGX’s chances to finance the projects at attractive levels in H1’23 as well as the chances to potentially include some form of trade financing into the mix.

Significant upside based on risk adjusted DCF
While risk appetite has recovered slightly in July/August, we maintain our key model assumptions for both projects, which show a very healthy financial profile, with a NPV at SEK 3.3bn and a repayment within three years. Reduced by project financing for both the Apatite project and Dannemora, where we expect debt of SEK 650m and new equity of SEK 650m, approximately SEK 2bn remains attributable to today’s shareholders. With an estimated probability of successfully passing the next two years’ milestones of 65-85% per year, this provides support for a fair value today of around SEK 850-1,460m or SEK 98-168 per share.

Should the management decide to include a trade finance solution into the financing mix, this would probably cap some of the upside with regards to rising iron ore and/or phosphate rock prices, but also limit shareholder dilution and raise potential further.

Read the report here https://www.emergers.se/grangx_j/

Contact

Johan Widmark
johan@emergers.se

About Emergers

This is a press release from Emergers. 

DISCLAIMER
Information provided here or on Emergers' website emergers.se is not intended to be financial advice. Emergers receives compensation for writing about the company in question. The company has been given the opportunity to influence factual statements before publication, but forecasts, conclusions and valuation reasoning are Emergers' own. Articles of analysis shall not be construed as a recommendation or solicitation to invest in the companies described. Emergers cannot guarantee that the conclusions presented in the analysis will be met. Emergers cannot be held liable for either direct or indirect damages caused by decisions made on the basis of information in this analysis. Investors are encouraged to seek additional information as well as consult a financial advisor prior to any investment decision.

For more information and

Henry Hank Paulson(Goldman Sachs, Spear Leeds & Kellogg & Redibook)
https://www.goldmansachs.com/our-firm/history/moments/1999-paulson-ceo.html

https://www.referenceforbusiness.com/biography/M-R/Paulson-Hank-1946.html

https://www.goldmansachs.com/investor-relations/financials/archived/other-information/ipo-prospectus-gs-pdf-file.pdf

https://www.goldmansachs.com/our-firm/history/moments/1999-ipo.html

https://casetext.com/case/spear-leeds

https://www.proquest.com/docview/198337569

https://www.goldmansachs.com/media-relations/press-releases/archived/2000/2000-09-11.html

https://money.cnn.com/2001/11/29/deals/archipelago/

https://www.redbookresearch.com/8702.html

https://en.wikipedia.org/wiki/Henry_Paulson

https://en.wikipedia.org/wiki/Peter_Kellogg

Best Regards
Richard Rosado

I worked with Felix Sater in the year 1994 at White Rock Partners on 17 State Street, New York, NY in the Wall Street Area as a license Series 7 & 63 Stockbroker. White Rock Partners became State Street(named after the address of the office) What a shame Felix Sater became an informer with the U.S. Government.

https://www.yahoo.com/news/9-11-families-call-trump-114100295.html

https://www.vox.com/2018/12/6/18127229/trump-felix-sater-tower-moscow-spy

https://whowhatwhy.org/politics/government-integrity/felix-sater-problematical-friend-trump-forgot/

https://www.pbs.org/newshour/politics/lawsuit-says-felix-sater-looked-to-launder-cash-through-trump-projects

https://en.wikipedia.org/wiki/Felix_Sater

https://www.goldmansachs.com/our-firm/history/moments/2001-september-11.html

https://en.wikipedia.org/wiki/Economic_effects_of_the_September_11_attacks

https://casetext.com/case/spear-leeds

https://www.proquest.com/docview/198337569

https://www.goldmansachs.com/media-relations/press-releases/archived/2000/2000-09-11.html

https://money.cnn.com/2001/11/29/deals/archipelago/

https://www.redbookresearch.com/8702.html

Best Regards
Richard Rosado

Spear Gas Turbine Missile
https://finance.yahoo.com/quote/GS/?p=GS

https://mbdainc.com/products/spear/

https://en.wikipedia.org/wiki/SPEAR_3

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https://www.goldmansachs.com/media-relations/press-releases/archived/2000/2000-09-11.html

https://www.goldmansachs.com/our-firm/history/moments/2001-september-11.html

https://en.wikipedia.org/wiki/Economic_effects_of_the_September_11_attacks

http://www.redbookresearch.com/8702.html

https://www.overtdefense.com/2022/07/05/china-tests-new-hypersonic-missile-with-transforming-engine/

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Best Regards
Richard Rosado

Redibook
https://www.argusleader.com/story/news/business-journal/2022/04/01/metabank-changes-name-pathward-after-facebook-meta-buyout/7247271001/

https://casetext.com/case/spear-leeds

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https://nypost.com/2022/02/16/nyse-embraces-digital-assets-files-for-nft-crypto-metaverse-related-licenses/

Best Regards
Richard Rosado

Goldman Sachs(GS)
https://www.goldmansachs.com/investor-relations/financials/archived/other-information/ipo-prospectus-gs-pdf-file.pdf

https://casetext.com/case/spear-leeds

https://www.proquest.com/docview/198337569

https://www.goldmansachs.com/media-relations/press-releases/archived/2000/2000-09-11.html

https://www.morningstar.com/articles/8023/goldman-sachs-in-profitable-deal-to-reach-retail-investors

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https://www.thestreet.com/opinion/archipelago-redibook-finalize-merger-pact-10013561

https://sec.report/Document/0001047469-04-006296/

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Kind Regards
Richard Rosado

World Trade Center
https://finance.yahoo.com/quote/GS?p=GS

https://www.wtc.com

https://www.wto.org

https://www.who.int

https://en.wikipedia.org/wiki/WorldCom_scandal

https://money.cnn.com/1999/10/05/worldbiz/sprint_mci/

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https://www.worldbank.org/en/country/china/publication/china-economic-update-june-2022

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https://www.world-exchanges.org

https://en.wikipedia.org/wiki/World_Federation_of_Exchanges

https://www.world-exchanges.org/membership-events#member-list

Best Regards
Richard Rosado

Redibook
https://casetext.com/case/spear-leeds

https://www.proquest.com/docview/198337569

https://www.goldmansachs.com/media-relations/press-releases/archived/2000/2000-09-11.html

https://www.morningstar.com/articles/8023/goldman-sachs-in-profitable-deal-to-reach-retail-investors

https://money.cnn.com/2001/11/29/deals/archipelago/

https://www.thestreet.com/opinion/archipelago-redibook-finalize-merger-pact-10013561

https://sec.report/Document/0001047469-04-006296/

https://www.marketwatch.com/story/archipelago-holdings-to-acquire-pacific-exchange

https://www.marketwatch.com/story/nyse-to-buy-archipelago-go-public

https://www.analysisgroup.com/Insights/cases/nyse-merger/

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https://www.industryweek.com/finance/software-systems/article/21933569/nyse-buys-euronext

https://www.businesswire.com/news/home/20121220005521/en/IntercontinentalExchange-to-Acquire-NYSE-Euronext-For-33.12-Per-Share-in-Stock-and-Cash-Creating-Premier-Global-Market-Operator

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https://en.wikipedia.org/wiki/Redstone_Federal_Credit_Union

https://www.cmegroup.com

https://cmefcu.org

https://www.chinabeigebook.com

https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm

https://www.facebook.com

https://en.wikipedia.org/wiki/Matchbook_FX

https://en.wikipedia.org/wiki/Bloomberg_Tradebook

https://www.bloomberg.com/professional/solution/tradebook/

https://finance.yahoo.com/quote/MORN?p=MORN

https://pitchbook.com

https://en.wikipedia.org/wiki/PitchBook_Data

https://pitchbook.com/media/press-releases/morningstar-to-acquire-pitchbook-data

https://www.morningstar.com/authors/2136/pitchbook

https://en.wikipedia.org/wiki/Collusion

Best Regards
Richard Rosado