Agreed on CD. I have always kind of felt that way about him, but that is partially why I like him too.
And you are correct that the analysis is high. Taxes, the NSR, etc. were not taken into account. Still at a 50% discount to my estimate, you have a 10+ mark-down to mine the resource. That seems still incredibly underpriced.
The primary issue that concerns me with LSG is the LOM only appears to be 5-6 years. At 102M long-term debt, they need to throw $20M a year at that to pay it off in 5 years (which may not even be an option depending on when it comes due). Still, at a 50% discount to my numbers, you are looking at a $60M in profit a year in 2013, which is enough to cover a $20M debt repayment.
All speculative. The devil is in the details. Rather than LSG having anything to do with it, I like better the idea of AEM swooping in to purchase the property in 2013/2014 to throw Goldcorp off-balance. We will probably be sub 6 cents by then though, unless we hit at KC this winter.
I doubt I will invest in LSG. Then again... I might be kicking myself in a year for sidestepping them after this analysis. I am too interested in other things right now, I believe, but who knows. I change my mind frequently. For now, I am long EXS, and that means even if we go sub 6 cents. However, if KC turns up dirt, and we are not at 2M+ oz at TPW by end of 2013, I might begin to think otherwise...
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