Landore Resources - Initiation of Coverage
BAM Gold Project being driven rapidly up the valuation curve helped by a decent exploration budget following recent funding
Landore Resources joined AIM in 2005 with plans to explore the vast Junior Lake Property in Ontario which has gone onto become quite a winner. Over the years, Landore has made a series of impressive discoveries and by 2013 Junior Lake Property was fast shaping up to be a significant Nickel-Copper-PGEs region. However, when the nickel price went south, a chance gold discovery led to the identification of the BAM Gold Project which has rapidly eclipsed all previous discoveries.
Multi-million ounces of gold potential along a 30km + strike length
The Junior Lake Property has one of the best addresses for gold mining in the world. A 1.015Moz resource has been delineated from just 6km of this highly prospective greenstone belt that extends across Landore’s acreage. Recent Pit Optimisation Review calculated a NPV(5) US$370m at US$1,900 gold for a 9 year LOM. A renewable 21-year mining lease is already in place.
About to really capture investor attention with possible full-priced exit
A well-funded infill/expansion drill programme, coupled with the arrival of eminent gold investor Eric Sprott as a 9.7% shareholder, looks set to re-invigorate Landore. On the cards is a big increase in the resource base plus further evidence of good continuity along the 31km trend and extension at depth, which is just what the major players are looking for.
Management team are proven mine finders, discovering 7Moz of gold
Bill Humphries (CEO) was MD at Brancote Holdings (1999 – 2002), a gold explorer with the same business model, which went from 14p to be taken over at 200p plus. He knows how to get top dollar from bidders.
NPV (12)/peer comparisons valuation suggests upside of over 300%
We believe our valuation is highly conservative and initiate coverage of Landore with a target price of 81.38p and a Conviction Buy stance.
RISK WARNING & DISCLAIMER
Landore Resources (LND) is a research client of Align Research. Align Research holds an interest in the shares of LND. Full details of our Company & Personal Account Dealing Policy can be found on our website http://www.alignresearch.co.uk/legal/
For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.
| Year to Dec | 2018A | 2019A | 2020E | 2021E |
|---|---|---|---|---|
| Revenue (£'000) | - | - | - | - |
| Pre-tax (£'000) | (2,783) | (2,146) | (3,000) | (3,700) |
| EPS¹ (£) | (0.06) | (0.04) | (0.04) | (0.04) |