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Edison Investment Research Limited Edison Initiation coverage on Auriant Mining (AUR) 06-March-2018 / 10:45 GMT/BST London, UK, 6 March 2018 *Edison Initiation coverage on Auriant Mining (AUR)* After five years of gold production via both gravitational and heap leach recovery methods, Auriant's Tardan plant is now being remodelled to a single carbon-in-leach (CIL) process flow route, which is expected to improve metallurgical recoveries by c 31% and halve total cash costs to c US$523/oz. At the same time, Auriant is also completing a definitive feasibility study (DFS) on its greenfields Kara-Beldyr prospect. Combined, the two are expected to achieve management's goal of 3,000kg (or 96,453oz) of gold output per year from FY22 (vs 809.5kg, or 26,049oz, in FY17), when the company is forecast to achieve an EBITDA of US$52.7m. On the basis that management executes the Tardan CIL project and the Kara-Beldyr project according to plan (and raises US$17.2m in cash via equity in Q118 and late FY18/early FY19 combined), we estimate that Auriant is capable of generating average cash flows of US$38.6m, average earnings of US$31.5m and average EPS of 16.7 US cents in the 12-year period from FY22-33 (inclusive), thus allowing it to pay maximum average potential dividends to shareholders in the order of 20.6c per share in the period FY25-33 (inclusive). Discounted at Edison's customary 10% discount rate, such a stream of dividends has a value of US$0.72/share in 2018 (assuming a conventional equity raise at the current share price), rising to US$1.29/share (SEK5.95, rising to SEK10.66) on the cusp of the company's first substantive dividend in FY25. However, this valuation rises to US$0.79/share (SEK6.53) in the event of the full exercise of Auriant's 57.0m outstanding warrants at a price of SEK2.50 in Q118 (a relatively anti-dilutive contingency as it involves the issue of fewer shares) and to a pre-money valuation of US$0.84/share (SEK6.94) ahead of the second round of funding. Click here [1] to view the full report. All reports published by Edison are available to download free of charge from its website www.edisoninvestmentresearch.com [2] *About Edison:* Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority [3]. Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities. *For more information please contact Edison:* Charles Gibson, +44 (0)20 3077 5724 Mining@edisongroup.com Learn more at www.edisongroup.com [4] and connect with Edison on: LinkedIn https://www.linkedin.com/company/edison-investment-research [5] Twitter www.twitter.com/Edison_Inv_Res [6] YouTube www.youtube.com/edisonitv [7] Dissemination of a CORPORATE NEWS, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. End of Announcement - EQS News Service 660853 06-March-2018 1: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=52cfc518422f4cbb5aa0a0c11b9f527f&application_id=660853&site_id=vwd&application_name=news 2: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=e7266211cbf0b72f2b3d94ab8bdaae97&application_id=660853&site_id=vwd&application_name=news 3: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=105fe9be9b5e36892886e5a39d51d4b7&application_id=660853&site_id=vwd&application_name=news 4: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=88c95533002fab2316572f9ef6cf3cc6&application_id=660853&site_id=vwd&application_name=news 5: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=edc5483da45ef361071849742dbf1595&application_id=660853&site_id=vwd&application_name=news 6: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=ec2d264fe4f303e2143a2e85c6eaa823&application_id=660853&site_id=vwd&application_name=news 7: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=6b959e4d7ee3c402b931a274d2bbe945&application_id=660853&site_id=vwd&application_name=news
(END) Dow Jones Newswires
March 06, 2018 05:45 ET (10:45 GMT)
