Follow the owners.
Underwrite the business.

Strategic operators, active investment funds, passive managers and insiders are different types of owners. Vehicles under common control are not independent votes of confidence. A royalty, stream or project partnership is not automatically an equity stake in the listed company.

A 10% crossing triggers investigation; it does not establish future outperformance. Historical findings need dated samples, an appropriate benchmark and independent validation. A current holder count is not a validated return forecast.

Project free cash flow = payable metal revenue − operating costs − royalties − cash taxes − sustaining and growth capital − working-capital investment − closure costs

We model each mine through its supported life, including remaining construction, ramp-up and reclamation. Streams and offtake terms affect the cash the owner actually receives. AISC alone is not a complete cash-flow model.

Base value relies on a supported mine plan. Resource conversion, exploration and extensions require separate assumptions. A depleting mine receives no automatic perpetual-growth terminal value.

Scenarios connect causes and consequences: a delay can add overhead and capex, postpone sales and require new financing. Higher gold prices can also mean higher royalties or taxes. We keep those relationships in the model.

Our starting basis is nominal, after-tax USD project cash flow before financing, discounted at a consistent nominal USD asset rate. These are initial house assumptions, not validated company-specific costs of capital.

Asset-specific rates must be justified against financing conditions, currency and residual risk; evidence can require a higher rate. We review the starting rates periodically. An equity return target is not interchangeable with an asset discount rate.

Real cash flows require real rates; nominal cash flows require nominal rates. The conversion is (1 + nominal rate) = (1 + real rate) × (1 + inflation). Comparisons with company studies reconcile these bases first.

Delays, overruns and identified fiscal changes belong in scenario cash flows. The discount rate captures time value and remaining priced risk. We avoid adding another blanket penalty for the same risk already modeled.

1. Discount each mine's cash flows and apply the company's attributable economic ownership.
2. Add excess cash and supported non-operating asset values; subtract debt, senior claims and the present value of corporate overhead.
3. Model financing within each scenario: its timing, net proceeds, fees, new debt and resulting share count must reconcile.
4. Calculate value per diluted share for each scenario, then apply the disclosed scenario weights.

New equity proceeds and new shares must appear together. Options and warrants need consistent treatment of shares and exercise proceeds. A funding gap changes the financing and dilution assumptions; it is not a second deduction of construction costs already included in cash flows.

We do not subtract interest from unlevered project cash flows and also deduct the same debt burden twice. Closure and streaming obligations are similarly reconciled to avoid double counting. Distress requires scenario-specific treatment of creditors and common equity.

• Valuation and share-price dates, currency, metal prices, inflation, tax and exchange-rate assumptions.
• Downside, base, upside and weighted NAV per share, with discount-rate and metal-price sensitivities.
• Capital requirements, debt, cash, corporate costs and scenario-specific dilution.
• Price relative to NAV, the required margin of safety and the facts that would invalidate the thesis.

A valuation discount is a reason to investigate, not an automatic buy signal. The necessary margin of safety depends on uncertainty, balance-sheet resilience and downside exposure. Neither a low multiple nor a large modeled upside overrides a failed cash-flow or risk filter.

Credible unresolved expropriation threats, materially disputed essential title or permits, sustained inability to operate or repatriate cash, and unbounded security exposure can exclude a company. A high discount rate cannot turn an unacceptable risk into an acceptable investment.

Portfolio fit also considers single-mine dependence, operator execution, leverage, liquidity and shared jurisdiction exposure. We examine the share of value and cash flow at risk; an average country score must not conceal the mine that supplies most of a company's value.