CGOOF - Continental Gold: Overvalued From A Risk-Adjusted Perspective
With a market capitalization of $301.26 million, Continental Gold's stock (CGOOF) appears overvalued because, by my estimates, the present value of Buriticá’s cash flows to shareholders is $177.5 million, and exploration at Berlin has been halted due to guerrilla violence. It's my opinion that the market has overlooked this valuation gap because the feasibility study (Page 1-15) and recent investor presentations (slide 37, February 2019) have applied a 5% discount rate to future cash flows, which overstates Buriticá’s project economics and that the market hasn't modeled the impact of