Benz Mining (TSXV:BZ) Could Be 39% Undervalued On Its A$150 Million Raising
Benz Mining (TSXV:BZ) has just completed a follow on equity offering of A$150.000001 million in Chess Depositary Interests, issuing 40,431,267 securities at A$3.71 each, with a A$0.1484 per security discount.
Benz Mining’s latest follow-on offering comes after a period of sharp share price gains, with a roughly 126% 90-day share price return and a very large 3-year total shareholder return. This follows a 7-day share price return that declined about 6%, indicating that short-term momentum has cooled.
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Benz Mining has raised substantial fresh capital after a huge multi year share price run, even as short term momentum has cooled. The business story is one thing. Whether the current valuation still stacks up is another.
Most Popular Narrative: 39% Undervalued
The most followed narrative on Benz Mining compares a fair value of about CA$6.28 per share with the last close of CA$3.86, implying a sizeable valuation gap using a 7.8% discount rate and a resource centric view of Glenburgh.
"If Benz can convert something approaching 4 to 6Moz or more into a credible first resource, with a meaningful proportion maintaining strong grades, the current valuation could be justified and the project could still have substantial upside because the complete Exploration Target and district remain larger. If Benz eventually establishes something approaching the conceptual 6.1 to 7.3Moz higher-grade core, plus additional lower-grade economic ounces, Glenburgh could become a genuinely major Australian gold development project."
Want to see what underpins that Glenburgh upgrade path? The narrative leans heavily on resource conversion, richer ounces and a re rated ounce value. The full story connects those ingredients into one valuation case.
Result: Fair Value of CA$6.28 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Benz Mining’s narrative still hinges on converting a conceptual 10.1 to 12.0Moz target into compliant resources and on future studies proving Glenburgh can be mined economically.
Find out about the key risks to this Benz Mining narrative.
Next Steps
With Benz Mining’s story so finely balanced between potential and execution risk, it makes sense to review the underlying concerns now and shape your own view using the 5 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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