Red River - Current market cap 120m.
Executive Summary
Red River is a small, miner, developer, and explorer. They seem to have picked up a number of (distressed or end of life???) assets cheaply and are making a small mining operation out of these. They hold assets with resources in Silver, Gold, Indium, Antimony, Copper, Lead, and Zinc.
Not posting a valuation as I'm not confident enough. This company seems like a bit of a bet on how long they can keep Thalanga running and continue adding value to their projects. They are quite excited by the Antimony reserves they have at the moment. To give a very highly questionable ballpark of what the company might be worth, if they were to achieve 38.5 mil profit (thinking potentially 35 mil for Thalanga and 3.5 mil for Hillgrove) for 4 years plus 18.5 mil for the next 6 at a dcr of 10% gives a market cap of 170 mil.
I'm not quite sure how to treat their "42 mil underlying ebitda" and whether that is a realistic figure for coming profit." I do think there's the potential for a lot of upside here with the exploration happening.
Worth noting the current excellent zinc and copper prices.
In 20/21 their revenue split was (almost all from thalanga).
Zinc - $42.9 mil
Lead - $10.1mil
Copper - $38.6 mil
Gold - $10.1 mil
Silver - $16.6 mil
More detail in forum post.
Questions
Is the royalty problem fully resolved yet?
Can reserves continue to be replaced at Thalanga?
What is the expectation of grade and profit from the Hillgrove operation?
How should I think about Depreciation and Amortisation with mining operations? I mostly need to exclude it, but keep in mind maintenance costs and the tax impact right?
