I'll thrown one into the pot. Chaco Resources. Already a four bagger in 2005 and more to come in 2006. I will copy a post made in the past few days on the chaco thread which gives a good summary of potential, albeit on the conservative side. Other potential new developments chould see an even higher end price. As always DYOR
Shares in issue including options of 13m = 507M
Net assets:
1. Per balance sheet 31.3.05 - £1.3m
2. Future cash from exercise of options - £0.5m
3. Columbia, Alea, net present value end 2006 $86m - £49m
4. Columbia, Puerto Lopez, 2006 NPV could be worth $54m - £31m
5. Paraguay. CDS has areas exclusively in Paraguay and is drilling currently. It has a market capitalisation of £16.8m. I don't know how its areas compare with Chaco's but I am assuming its reasonable to equate the value of Chaco's Paraguay areas with those of CDS. Value of Chaco in Paraguay - £16.8m.
Therefore the 2006 net present value of Chaco's current assets is approx £98.6m.
The present net value per share of Chaco's assets is approx 19.5p.
The shares are currently priced at 7p, a discount of 61% on projected Net Asset Value. I'm going to assume the discount will narrow to 30% as news emerges in 2006 on current assets. That gives a share price of 13.5p.
Now onto Primavera. If Chaco get a 55% stake and the resource estimate is 200m barrels, at soem 20 times the size of Puerto Lopez it implies a 2006 NPV of £310m, some 61p per share but until proven it might add 5p per share. I'm going to ignore any other new developments. Therefore, I'm going nap on a share price of 18p.
