Freegold Ventures

CN: FVL

CA$12.3m 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 of Golden Summit demonstrated a post-tax internal rate of return of 20% and a net present value (NPV) of US$188m (US$0.99 per existing Freegold share) at a gold price of US$1,300/oz, or US$265m at US$1,400/oz Au. Fully diluted, we estimate that the NPV of the stream of dividends to Freegold’s shareholders from the development of the Golden Summit project (at a 10% discount rate) is US$0.131/share. However, this valuation increases to c 18.8c/share in the event that Freegold is able to double its oxide resource to 1.2Moz; there is also potential to identify areas that host higher grade material.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 0.0 (0.6) (0.6) (0.4) N/A N/A
2018A 0.0 (0.8) (0.8) (0.4) N/A N/A
2019E 0.0 (0.8) (0.9) (0.5) N/A N/A
2020E 0.0 (0.8) (1.3) (0.7) N/A N/A
Industry outlook

In the meantime, FVL (as operator) has commenced exploration at Shorty Creek where South32 may earn a 70% interest in return for a potential investment of US$30m, which will allow it to be explored and validated with no further dilution to Freegold shareholders. A US$2.2m exploration programme is currently underway and will focus on the outlying areas of the project (in addition to those already drilled) with the intention of proving up its district scale potential.

Last updated on 16/07/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 1
Forecast gearing ratio (%) 3
Price performance
%
1m
3m
12m
Actual 30.0 0.0 (18.8)
Relative* 28.4 0.0 (18.5)
52-week high/low C$0.1/C$0.0
*% relative to local index
Key management
Gordon Steblin CFO
Alvin Jackson VP Exploration & Development
Kristina Walcott President & CEO