|Fancamp Exploration Ltd. (TSX-V: FNC) (US listing: FNCJF) (Frankfurt: 3F9) just had coverage initiated on it by mining expert Jay Taylor. In short, here is what he said “Perhaps upwards to a four-fold increase over current values could be enjoyed by shareholders as the market begins to discount very sizeable future royalty cash flows." - J. Taylor Feb. 28, 2014|
Fancamp has effectively parted with their main properties in exchange for interests in other companies and retention of royalties, here is a summary:
15,025,000 shares in Champion Iron Mines (10.9%) or $0.36 a share = $5.4 million
6,000,000 shares in Argex Titanium (4.5%) or C$0.82 a share = $4.9 million
43,000,000 shares in Lamelee Iron Ore (59%) or C$0.17 a share = $6.6 million
They also have cash at hand of ~$1.0 million
So all that above is total value of ~$18 million
With a total of 139 million shares (171 million fully diluted)
That is near 13 cents of value per share – so with FNC.V trading under that right now (and with no cash burn issues) FNC.V is dramatically undervalued.
The large upside to FNC.V comes in the royalties it owns on key properties it has others advancing:
1) A 1.5% NSR on Champion Iron Mines (=$12 million a year once in production if 20mtpa).
2) A 2% NSR on Argex project La Blache (up to 4% after two years) (=$3.50 million a year/$7.00 million a year).
3) A 1.5% NSR on Lamelee iron Ore project.
4) A 1.5% NSR on Uracan Resources North Shore Project.
5) About $15 million due FNC (if partner does full earn-in) on Koper Lake Project, Ring of Fire - Ontario, adjacent Noront Resources Eagle's Nest Discovery (~400 metres to the southeast) + a Gross Metal Royalty of 2%.
FNC also has projects which they are planning to sell, spin out – The biggest being its Magpie Iron-Titanium-Chromium-Vanadium deposit in Quebec, considered to be among the world's largest undeveloped titaniferous magnetite deposits.
Corporate Website: fancampexplorationltd.ca
Recent article: miningmarketwatch.net