Disclaimer
We are not financial advisors; do not take this as financial advice. Rock report has not been paid to produce this article; all views are our own and do not represent the mentioned companies.
No shares are held in the mentioned companies.
Rupert Resources is a TSXV-listed exploration company progressing its Lapland project and, in particular, the Ikkari discovery.
Ikkari is a world-class true discovery made in 2020, hosted within the Central Lapland Greenstone Belt. This is a part of the world where finding gold can be so easy yet so difficult. Why? Little outcrop, rough nature, off the beaten track, nestled in the vast Lapland forest
So, how did they make this discovery?
Systematic grid BoT sampling, one historic sample indicated gold, 0.2 ppm in soil, was followed up with tighter infill grid sampling, with a clear cluster of gold appearing. Ranging around 1 ppm Au. The first drill hole ever drilled to drill test the cluster – assayed 54m grading 1.5g/t Au from 25m, under 13m of glacial till cover material. Truly a world-class discovery and at the very least making it one of Europe´s most interesting gold projects. This may have been one of the few cases where deep till sampling did what it says on the can.
The rest is history, or is it?
Rupert, since that point, has drilled over 110,000 meters of core and produced some outstanding drill intercepts, hundreds of meters at multiple grams per ton. Topping the charts with 200m @ 4.2 g/t Au. While the gold is buried under a thick blanket of glacial till ranging 5-40m thick, the actual mineralization is relatively shallow between 20-300m, which plays perfectly into the hands of Rupert.
Drilling culminated in a PFS and an MRE:
Probable Mineral Reserve of 52Mt at 2.1g/t Au for 3.5Moz Au
After-tax Net Present Value (5% discount) (“NPV”) of $1.7 billion with unlevered Internal Rate of Return (“IRR”) of 38% and payback after 2.2 years, assuming a long-term market consensus gold price of $2,150 per troy ounce (“oz”). NPV of $2.5 billion with IRR of 49% and 1.7-year payback at $2,650/oz
Expected lowest quartile all-in sustaining cost (“AISC”) of $918/oz over LOM, and $717/oz during years 1 to 10, primarily due to a high open pit grade and low strip ratio
Long life: 20-year life of mine (“LOM”) comprising an open-pit operation for the first 10 years with average annual production of 227koz per annum, transitioning to an underground operation (years 10 – 20)
Manageable initial capital requirement of $575 million
Indicated + Inferred resource of over 4 M oz
Financing and Realistic Money
Rupert is valued at just over 1 billion CAD Market Cap, with an NPV of $1.7 billion at $2,150/oz and a CAPEX of just $575 million, which is relatively low if compared to other global projects.
Interestingly, the company showed in the PFS that at 3,000 gold, the project has an NPV of over $3 billion. Today gold is at $3,310….
At that level, the payback period is around 1 year
Being valued at around a third of the actual in situ value of gold is a benefit for you; the company is still being traded based on the previous PFS, and rightly so, but the actual value of the deposit has skyrocketed.
Often, smaller companies struggle to raise the CAPEX and resort to high-interest loans and other means to finance. Rupert is valued above and beyond the CAPEX. They should be able to find a solution for financing without resorting to those means, especially when you consider my last point.
Agnico Eagle
Agnico is operating the Kittilä Mine, not too far away from Ikkari, and is a strategic investor in Rupert, holding just over 15% of the company with subsequent purchases over the years. If Rupert can’t or won’t build it, Agnico will. This isn’t the first rodeo for Agnico in northern Finland for gold, and the team and established already set up to build a mine. The financials may be too enticing for Rupert to walk away from the project, and they may look to become a producer; only time will tell.
But as a shareholder, your position is hedged against that, knowing the fact that a major is lurking in the back of the room.
I urge you to look at the company’s website and social media and read through the technical report.
Just so you know, this is not a paid article, and the team at Rock Report does not financially benefit from this in any way. No shares are held by the team at Rock Report.
Congrats to the team at Rupert
