BERAL, INC.
Andrew Racz
Director of Research
300 East 54 Street, Suite 26C
New York, NY 10022
Phone: (212) 319-6949
Fax: (212) 753-1944
E-mail: mlikar@aol.com

Pacific Booker Minerals Inc.

PBM-NYSE MKT
BKM.V TSXV

February 4, 2014

PRICE-

CDN $6.75 TSXV

52 WK.

PRICE RANGE-CDN

$2.45-$8.38

 

$6.10 NYSE

52 WK.

PRICE RANGE-

$1.71-$8.20

 

 

 

 

 

Shares Outstanding

15.1 Million fully diluted

Market Cap

$75.37 M

Renaissance of Mineral Exploration

Pacific consists of Morrison Copper, gold, molybdenum and some silver. The project, which in size could eventually reach $1 billion is the renaissance or rather the rejuvenation of big projects that can be developed systematically in territories in British Columbia. Actual future results may differ materially from those assumed or described in such statement as a result of the impact of issues, risks and uncertainties. The project which is a NI-101 compliant mineable reserve and has many variables . That is why they consider it the renaissance of mineral exploration.

The Morrison Copper Gold project’s metallurgy is straight forward and good recoveries and acceptable concentrates can be obtained.

  • Pacific Booker Minerals Inc. (PBM) is a publicly traded company ( TSX-Venture : BKM; NYSE MKT: PBM)
  • PBM owns 100% of the Morrison property located in Central British Columbia, Canada
  • PBM is proposing a 30,000 tonnes/day open-pit mining and milling operation for the production of copper/gold concentrate and molybdenum concentrate

Simply speaking, the production is approximately 135,000 to 160,000 lbs. of concentrate per year containing copper, gold and molybdenum.

Grand production rate is 30,000 tonnes /day ; a meaningful sum in the individual mineral production.

It should be mentioned that the company has the following statistics.

  1. 15.1 million shares outstanding –fully diluted
  2. Price of $7
  3. A market cap of $100 million
  4. A company is estimated to produce minerals in about 30 years from the day of getting final approvals.

The total mineable reserve included in the measured and indicated resource, classified and provan and probable, at the Net Smelter Return ( NSR ) cut-off-value of $CDN 5.60/t, is 224.25Mt with an average grade of >330% Copper, 0.163g/t Gold and .004% Molybdenum.

It should be mentioned that in our estimate and estimates in the industry, suggest that in 3 or 4 years’ time the price of copper would be up at least 30% and gold maybe 100%. As a result of higher prices the value of the Morrison Copper Gold Project is going to be substantially higher today.

Furthermore, the life expectation of the Morrison Project is 21 years. The recovery potential therefore is very large.

  • The mineable reserve is 224.25 Mt( proven: 115.12 Mt/ (probable: 109.13 Mt);
  • The waste total is 184.12 Mt for a strip ratio of 0.82:1;
  • Recoveries are Copper 84.0%, 56.0% Gold and 50.0% Molybdenum
  • Recovered metal is 1.37 billion lbs ( 625,000 tonnes) Copper 658,090 oz ( 25tonnes) Gold and 10.5 million lbs ( 4,559 tonnes ) Molybdenum
  • Mine life of 21 years;
  • Capital cost estimated at Cen $516.68 million ( including a CDN $59.92 million contingency allocation );
  • Payback period of capital is 4.2 years.

The operating cost is $8.15 per ton. Present value at 8% discount rate is 499 million and the payback period is 4.2 years.

If we assume a 21 year life expectancy, we are talking of 5 times current payback which is $2 ½ billion.

Considering that the company has 50 million shares and the potential $2 ½ billion payback, we can calculate that the actual projected value of the stock is almost $250 per share minus the cost of borrowing and the dilution of the shares.

  • Shares Outstanding 12.4M
  • Shares Diluted- 15.1M
  • Stock Price ( October 1,2013 )- $5.10
  • Market Cap ( October 1, 2013 )- $63 M
  • No Debt

The Morrison Copper Gold Project at the moment depends on the legal issues of the company.

A relatively modest capitalization and lack of debt is part of the attraction of this company which has:

  • Ore production rate of 30,000 tonnes/day
  • The total mineable reserve is 224.25Mt with an average grade of .330 Copper, .0163g/t Gold and .004% Molybdenum
    -Proven 115.12 Mt with an average grade of 0.355% Copper, 0.173 g/t Gold and .004%Molybdenum
    -Probable: 109.13Mt with an average grade of .304% Copper, .152g/t Gold and .004%Molybdenum
  • Recovered metal is 1.37 billion lbs ( 625,000 tonnes ) Copper, 658,090 oz ( 25 tonnes ) Gold and 10.05 million lbs ( 4,559 tonnes ) Molybdenum;
  • Mine Life is 21 years
  • Proposed Construction Date is 2014
  • Proposed Start of Operation is 2016

The legal implications covering the future of the company is at the moment in theoretical terms, is unknown and in practical terms, promising.

According to the company, the last outstanding issue is obtaining the environment certificate which the current ministers have to reconsider.

On December 9, 2013, the BC Supreme Court ruled that the Minister’s decision refusing to issue the certificate failed to comport with the requirements of the procedure of fairness. The Court ordered that the Minister’s decision be quashed and set aside and ordered that the company’s application for an environmental certificate be remitted to the current Ministers for reconsideration. Ruled that PBM is entitled to costs.

If the current Ministers approve the project, Pacific Booker based on its very modest capitalization would certainly be valued at a substantially higher price.

Furthermore the company would be in a very good financial position.

The company does have over 15 million shares but it also has as part 4.2 million warrants at the price of $4. If they are exercised after the court appeal or court decision, the company could immediately obtain $10 million and engage on its first program of developing the company. The stock is likely to go up to much higher levels over $10 and therefore the company could have a market value of $150 million or more. Considering that the price of $4 only a few months ago had a $60 million market cap, this is a meaningful change and Pacific could probably raise 50 million convertible debentures at a $10 price or obtain a partner or obtain major investors.

Thus Pacific Booker Minerals would be a meaningful mineral company. A renaissance of those mining entities that came from original exploration and became a major entity.

It is our intuition that this would be the beginning:

  • Pacific has tremendous reserves estimated at at least $6 billion and a much higher price of minerals other than gold and more drilling may be $10 billion.
  • It has no debt and has a moderate first level financing.
  • With a higher price and the $10 million and the immediately development of the reserves and the potential 250-350 annual product in 3 years, it would be a possibility of a major financing and a major development.

Disclaimer

Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.

 

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Andrew Racz. 300 East 54 Street, Suite 26C, New York, NY 10022
Phone: (212) 319-6949 Fax: (212) 753-1944. E-mail: mlikar@aol.com

Copyright © 2011 Andrew Racz. All Rights Reserved.

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