In short: "Huge upside in the Cadillac camp. But the market is going out with what I see as an absurd valuation relative to the proven and probable reserves and resources." He respects the land — "a truly spectacular land position bolting onto Agnico Eagle basically everywhere," four past producers including Kerr-Addison — and Pierre Lassonde's ~$5bn of shareholder value over a decade. "What bothers me about it is the valuation. I'm just not willing to pay up like that without a lot more by way of reserve and resource."
Cadillac holds the historic Kerr-Addison ground in the Cadillac trend of the Abitibi, is chaired by Pierre Lassonde (co-founder of Franco-Nevada) and has just come to market. Rick likes essentially everything about it except the price.
The asset: "a truly spectacular land position bolting onto Agnico Eagle basically everywhere," with four past producing mines on it including Kerr-Addison. The backer: Lassonde has delivered something like $5 billion of shareholder value in a decade across several vehicles.
The problem: "the market is going out with what I see as an absurd valuation relative to the proven and probable reserves and resources" — you are being asked to pay today for ounces that have not yet been proved to exist. "I'm just not willing to pay up like that without a lot more by way of reserve and resource." A clean example of separating a great asset from a good investment.
41:44But the market is going out with what I see as an absurd valuation relative to the proven and probable reserves and resources. Pierre's had an amazingly hot hand in the last 10 years. It isn't just Franco-Nevada — things like ATEX and Aura. I mean Pierre has probably delivered $5 billion worth of value to shareholders in the last 10 years.
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