PERTH (miningweekly.com) – Junior Minotaur Exploration has appointed Argonaut Capital to help extract value from its shares, with the company arguing that share prices were trading well below expectations.
Speaking at the company’s annual general meeting, Minotaur chairperson Roger Higgins noted that based on the Great White kaolin-halloysite project, in South Australia, alone, the company’s shares should be worth some 36c a share.
Minotaur shares were trading at around 14c a share on Wednesday.
Minotaur holds a 25% interest in the Great White project, with fellow listed Andromeda Metals holding the remaining interest. Andromeda’s market capitalisation was currently estimated at some A$543-million, implying a project value of A$724-million to Great White, Higgins said.
“The value discrepancy concerns your directors, so we have engaged the services of Argonaut Capital to help frame Minotaur’s future benefit from the commercial operation of Great White and provide advice towards realising appropriate shareholder value.
“We are confident that Andromeda’s publication of a definitive feasibility study, expected by about the end of this year, will also guide investor recognition of Minotaur’s share of cash flows and that too will stimulate closure of the valuation gap,” Higgins said.
A previously completed prefeasibility study at the project site had estimated pre-tax cash flows of A$1.9-billion and a pre-tax net present value of A$736-million for the 500 000 t/y operation with a mine life of 26 years.
In addition to the Great White project, Minotaur also holds several copper and gold tenements in Queensland.