Freegold Ventures

CN: FVL

CA$11.3m market cap

CA$0.06 last close

Freegold’s focus is on copper and gold exploration near Fairbanks, Alaska. It holds both the Golden Summit project (on which a PEA was completed in January 2016) and the Shorty Creek copper–gold porphyry project, where potential by-products include gold, silver, cobalt and tungsten.

Investment summary

Tetra Tech’s preliminary economic assessment (PEA) of Golden Summit demonstrated a post-tax internal rate of return of 20% and NPV of US$188m (US$0.99 per existing Freegold share, post-placing) at a gold price of US$1,300/oz. Fully diluted, we estimate that the net present value (NPV) of the stream of dividends to Freegold’s shareholders from the development of Golden Summit (at Edison’s customary 10% discount rate) is US$0.125/share in FY18, rising to a peak of US$0.42c in FY37.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2016A 0.0 (1.0) (1.0) (0.7) N/A N/A
2017A 0.0 (0.6) (0.6) (0.4) N/A N/A
2018E 0.0 (0.8) (0.8) (0.4) N/A N/A
2019E 0.0 (0.8) (1.0) (0.6) N/A N/A
Last updated on 20/02/2019
Industry outlook

However, this valuation increases to c 18c/share in the event that Freegold is able to double its oxide resource to 1.2Moz, thereby supporting a doubling in early-stage production rates. In the meantime, CY18 exploration has continued to define and expand porphyry style mineralisation at Shorty Creek, where we estimate that one target could contain in the order of 0.8Mt of contained copper resources (excluding co-products). In October, FVL raised C$1.2m via the issue of 14.9m shares (plus warrants).

Last updated on 20/02/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 1.8
Forecast gearing ratio (%) 5
Price performance
%
1m
3m
12m
Actual 0.0 (14.3) (29.4)
Relative* (4.0) (19.0) (31.6)
52-week high/low C$0.1/C$0.1
*% relative to local index
Key management
Gordon Steblin CFO
Alvin Jackson VP Exploration & Development
Kristina Walcott President & CEO