1. Earnings / Cash Flow
Used for mining companies already in production. Copper Fox does not fall into this category.
2. NAVPS (Net Asset Value Per Share)
Used for mining companies that have at least completed an economic assessment of their property (like Copper Fox). This method accounts for the NPV of the project and also factors in the assets of the company. The NPV is often discounted at 12% for projects that are not fully permitted or financed.
3. Total Cost Analysis
Used for mining companies in the PEA/PFS/BFS stage (like Copper Fox). This method values a copper company based on the total cost to recover a pound of copper. It is useful for non-producing companies that have completed an economic assessment, but are not yet near production.
4. "Pounds in the ground"
Used for mining companies in very early stages. This is the least accurate way to value a mining company and is based strictly on the in-situ value.
To complete a valuation of Copper Fox, I would use a 75% weighting of method 2 and a 25% weighting of method 3. For method 2, I would use 1.2 x 12%NAVPS. For method 3, I would use $1.50/lb of recoverable copper. I am tempted to crunch some numbers but there are still so many variables that will affect the target price.
