Orsu Metals Corp (ORSUF)

[downthehatch]

From the report on Orsu by Couloir Capital, which announced today it is initiating coverage of Orsu Metals:

Because we believe the company at its current stage in the exploration and development cycle is valued largely on the basis of its net resources, any expansion in the resources will imply an expansion in the net asset value of the company. Should this occur, we believe it will lead to a significant uplift in OSU’s intrinsic value. With the pilot mining initiative forecasted to deliver potentially enough cash to cover exploration work for the next 12 months, this potential uplift in net asset value could come without the risk of dilution associated with other junior miners who rely on equity financing to fund early-stage exploration campaigns. In addition, for the lift of the pilot mining stage, our rudimentary arithmetic implies any free cash production in excess of a 3% margin is bonus on top of the planned exploration budget, implying significant earnings leverage for OSU. We do note of course that our argument is based on fairly limited information, and we temper our upbeat outlook with the warning that the economics of the pilot mining programme could always end up being unfavourable to OSU. As a result, we do not factor it into our valuation models for the company