Aftermath Silver: Valuation Analysis
Key Projects:
- Berenguela (Peru):
- Resource: ~140M oz silver (80 gpt) + manganese credits (~500M oz AGEQ).
- Annual Production Potential: ~5M oz/year.
- PEA: Expected in Q4 2024.
- Development Timeline: ~4-5 years to production.
- Challacollo (Chile):
- Resource: ~45M oz silver (180 gpt).
- Annual Production Potential: 2-3M oz/year.
- Development Timeline: Likely 6-7 years to production.
Valuation Scenarios:
- Base Case ($25/oz Silver):
- FCF per oz: $25 - $15 (AISC) = $10/oz.
- Annual FCF: 7.5M oz x $10 = $75M.
- Valuation (10x FCF): $75M x 10 = $750M.
- Stock Price: $750M / 200M shares = $3.75/share.
- Upside Case ($50/oz Silver):
- FCF per oz: $50 - $15 = $35/oz.
- Annual FCF: 7.5M oz x $35 = $262.5M.
- Valuation (10x FCF): $262.5M x 10 = $2.625B.
- Stock Price: $2.625B / 200M shares = $13.13/share.
- High-End Case ($100/oz Silver):
- FCF per oz: $100 - $15 = $85/oz.
- Annual FCF: 7.5M oz x $85 = $637.5M.
- Valuation (10x FCF): $637.5M x 10 = $6.375B.
- Stock Price: $6.375B / 200M shares = $31.88/share.
Summary:
- At $25 silver: $3.75/share.
- At $50 silver: $13.13/share.
- At $100 silver: $31.88/share.
Key Risks:
- Long timeline to production (4-7 years).
- Potential dilution for financing.
- Heavy reliance on manganese credits for Berenguela.
- Execution risks for large-scale project development.
Conclusion: Aftermath Silver has 10-20x upside potential in a bullish silver market. It’s a speculative long-term investment requiring patience and confidence in execution.
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Disclaimer
The user RockeTeller holds no position in TSXV:AAG. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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