Looking for a reason to buy KWG

Massive Black Horse Chromite Discovery

Black Horse deposit has an Inferred Resource Now 85.9 Million Tonnes @ 34.5%

Reply New Message

Prev Message Back To Forum Threaded View Next Message

mike97

Rank: President [?]

Points: 16595 [?]

Votes: 169 Score: 3.7 [?]

Your Vote:

Please Log In to Vote

Did you know? You can earn activity points by filling your profile with information about yourself (what city you live in, your favorite team, blogs etc.)

Looking for a reason to buy KWG

posted on Mar 24, 2008 07:59AM

Posted this imaginary analysis on SPQ where I bought this morning. For some reason I never bought KWG even though they seem to be in a number of JV's with SPQ. Does SPQ have more and better claims? The low market cap of KWG makes it look interesting.

McFaulds Lake Valuation Let us hypothesize that the following Mcfauld’s Lake companies get bought out for $18B. This is not an unreasonable valuation given Voisey’s Bay initial valuation. Since we don’t know which anomalies will be the best, lets for the sake of argument say NOT gets $10 B and the others get $1B each. Which investments would give the greatest ROI. My first thought would be NOT followed by those with the lowest outstanding number of shares and share price. Let’s do some rudimentary calculations and add $1B to each company’s market cap and $10 B to NOT. Apologies for the math if there are mistakes.

Stock	M Shares	SharePr. Mar 21	Market Cap	Add $1B or $10B	New SP	Gain
FNC	27.5	2.54	69.85	1069.85	38.90	15 x
PRB	23.9	0.78	18.64	1018.64	42.62	54 x
NOT	125.6	5.30	665.70	10665.7	84.92	16 x
SPQ	301.6	0.115	34.68	1034.68	3.43	30 x
BMK	137.2	0.42	57.62	1057.62	7.70	18 x
FWR	166.8	0.36	60.05	1060.05	6.35	18 x
TME	67.9	0.59	40.06	1040.06	15.32	26 x
UC	106.2	0.34	36.11	1036.11	9.76	28 x
KWG	244.6	0.095	23.27	1023.27	4.18	44 x