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Original-Research: West Mining Corp. - von Sphene Capital GmbH
Einstufung von Sphene Capital GmbH zu West Mining Corp.
Unternehmen: West Mining Corp.
ISIN: CA9546061099
Anlass der Studie: Update Report
Empfehlung: Buy
seit: 11.02.2022
Kursziel: CAD 0,88 (unverändert)
Kursziel auf Sicht von: 36 Monate
Letzte Ratingänderung: -
Analyst: Peter Thilo Hasler, CEFA
Acquisition of a new property with multiple copper showings
We confirm our price target of CAD 0.88 and our long-term (36 months) Buy rating for the shares of the CSE traded West Mining Corp. We believe this undervalued, below radar company offers a highly attractive investment case and expect the stock to re-rate on the first hint of positive drilling news, especially at the flagship Kena and Daylight gold projects.
West Mining has executed an option agreement to earn a 100% undivided interest in Blue Cove copper property in Newfoundland. Located at the head of Fortune Bay, in south-east Newfoundland, the Blue Cove copper property comprises 232 claims covering an area of 5,800 ha.
Over the past two years, several new targets were identified through prospecting at the property, where copper mineralisation mostly occurs in altered volcanic rocks and sediments, with the primary copper minerals being chalcocite with more minor bornite and chalcopyrite. The best assay obtained to date from grab samples returned values of 5.1% Cu, 33 g/t Ag and 0.27 g/t Au.
In accordance with the agreement, West Mining will execute the option to acquire the stake by making a (1) CAD 160,000 cash payment to be paid in instalments over the next 48 months, (2) issuing 1.7m common West mining shares to the optionor, and (3) pay a 3% net smelter returns royalty to the optionor (which West Mining can reduce to 2% for a one-off payment of CAD 1m). In addition, West Mining will also incur an aggregate exploration expenditure of at least CAD 750,000 on the property.
Given the nearby small town of Terrenceville and its deep seaport, infrastructure is good, making Blue Cove a low-cost property to explore, in our view. In addition, since this asset is a turnkey operation with a Newfoundland-based crew on hand makes it an asset that does not require specific management attention.
In our view, the company's current valuation does not discount neither its Kena/Daylight nor its newly acquired Blue Cover copper project and certainly excludes any real potential upside from future exploration. Last year, West Mining announced a resource of 2,774,000 oz Au Inferred and over 562,000 oz Au Indicated at an economically viable cut-off grade of 0.25 g/t gold. Applying a value of USD 60 and USD 50 per ounce indicated and inferred gold, respectively, the implied value for West Mining is CAD 215.5m or CAD 2.20 per share. Given the junior mining character of the business model, we apply a P/NAV multiple of 0.40x and therefore calculate a price target of CAD 0.88 per share.
Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/23369.pdf
Kontakt für Rückfragen
Peter Thilo Hasler, CEFA
+49 (89) 74443558/ +49 (152) 31764553
peter-thilo.hasler@sphene-capital.de
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