NSGold’s Strong Upside Potential with Peers Valued 2.95 Times Higher
NSGold Corporation (NSX – $0.14) currently focuses most of its resources on its flagship property, the Mooseland gold project, which has an NI 43-101 compliant resource estimate of 390,000 ounces of gold based on results from 167 drill holes totaling 40,371 metres. NSGold will increase that resource in the 2nd quarter of 2012 when analytic results from its 2011 drill program are incorporated in an updated resource report.
In a recent Letter to Shareholders, Mr. Hans Van Hoof, the Chairman and CEO of NSGold, mentioned one sentence that particularly caught investors’ attention: “NSGold Corp. will be the vehicle for our next potentially transformational deal, one that I hope will also alleviate the shares’ illiquidity.” This suggest to us that a significant corporate transaction may be on the horizon.
NSGold has a strong management team with the right balance of financing and mining experience. Mr. van Hoof has vast connections in the financial markets and its CFO, Mr. Glenn Holmes, helped raise a quarter of a billion dollars for a previous mining company he was employed at. Moreover, Mr. van Hoof, through a private company, is NSGold’s largest shareholder as he controls close to 11.1 million shares of NSGold, or about 25.54% of all issued and outstanding common shares.
NSGold has an Enterprise Value per Resource of $17.56, while six of its peers trade at an average EV/Resource of $51.88, or 2.95 times higher than NSGold’s. Based on these calculations and the positive outlook for the Company, we reiterate our buy recommendation for NSGold with a price target of $0.53 or 295% higher than today’s 30-day average stock price.
Download your copy of the first quarter 2012 NSGold Company Report.
|Smallcaps.us Advice: Buy||Price Target: $0.53||Latest Company Report (pdf)|
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