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MSB - Scully Royalty Is An Undiscovered Royalty Company Worth Double With A Huge Margin Of Safety
Mesabi Trust
Overview of Investment Thesis
SRL holds a 7% royalty on the Scully mine in Labrador, Canada which is currently valued by the market at 2.2x EBITDA when the market is valuing similar royalty companies at between 8x and 12x.
The mispricing is due to the mine having been shut down for several years as a result of Cliffs' bankruptcy of its Canadian operations as well as the new operator being privately held, so little information is released to the market.
If one were to value SRL at the low end of the market's comps as