Assessing Santana Minerals (ASX:SMI) Valuation After Step Out Drill Success And Project Expansion Plans

Simply Wall St.01-13

AdvertisementWhy Santana Minerals is back on watchlists Santana Minerals (ASX:SMI) has drawn fresh attention after reporting a step out drill hole at the Rise and Shine deposit that intersected 38.6m ...

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The 1 year total shareholder return...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"SMI.AU":"Santana Minerals Ltd","BK7104":"黄金","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","SMI":"VanEck HIP Sustainable Muni ETF"},"translate_title":"在退出钻探成功和项目扩张计划后评估桑塔纳矿业(ASX：SMI)的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DCF":1,"SMI.AU":1.5,"SMI":1.5},"content_text":"AdvertisementWhy Santana Minerals is back on watchlists Santana Minerals (ASX:SMI) has drawn fresh attention after reporting a step out drill hole at the Rise and Shine deposit that intersected 38.6m at 1.70g/t gold, extending mineralisation beyond prior drilling limits. See our latest analysis for Santana Minerals. The drilling update has arrived during a period of strong momentum, with a 19.78% 7 day share price return and a 36.25% 30 day share price return at A$1.09. The 1 year total shareholder return of 139.56% and 5 year total shareholder return above 10x hint at sustained enthusiasm around the company’s long term potential. If you are watching gold explorers react to drilling news, it might also be worth widening your search to fast growing stocks with high insider ownership as another source of ideas. With Santana still loss making and generating no revenue, yet trading after a strong share price run and sitting below some analyst valuation metrics, you need to ask yourself: is there still a buying opportunity here, or is the market already pricing in future growth? Price-to-Book of 8.9x: Is it justified? On a P/B of 8.9x at A$1.09, Santana Minerals trades well above the broader Australian metals and mining P/B average of 2.7x, while our DCF model suggests a fair value of A$9.42. P/B compares the company’s market value to its net assets. It is often a common yardstick for early stage resources names that are not generating revenue or profits. For an explorer like Santana, a higher P/B can signal that investors are placing a premium on the perceived quality or size of its projects rather than the current balance sheet alone. Compared with the wider Australian metals and mining industry, Santana’s 8.9x P/B is more than three times the 2.7x industry average, which is a strong premium. However, relative to a peer group average P/B of 38.1x, the same 8.9x multiple sits at a clear discount, suggesting the market is assigning Santana a lower valuation than some closer comparables. See what the numbers say about this price — find out in our valuation breakdown. Result: Preferred multiple of 8.9x price-to-book (ABOUT RIGHT) The SWS DCF model points to a fair value of A$9.42 per share, which is very high versus the A$1.09 last close, implying a wide gap. Our DCF model works by estimating future cash flows from the company’s assets and projects, then discounting those back to today using a required return to arrive at a present value per share. For a pre revenue, loss making explorer such as Santana Minerals, that means the model is very sensitive to assumptions about eventual production, margins and timing of cash flows. The strong share price performance and lack of current revenue highlight how much of the current and implied value rests on future project outcomes rather than today’s financials. Look into how the SWS DCF model arrives at its fair value. Result: DCF Fair value of A$9.42 (UNDERVALUED) However, there are clear risks, including the company’s loss of A$1.69m, lack of revenue, and the possibility that future drilling or studies may not meet expectations. Find out about the key risks to this Santana Minerals narrative. Another angle on what the price is saying Our DCF model suggests a fair value of A$9.42 per share, which is very high compared to the A$1.09 last close. The 8.9x P/B ratio sits well above the 2.7x industry average but below the 38.1x peer average. One model flags a large gap, the other points to a premium, so which signal do you trust more? Look into how the SWS DCF model arrives at its fair value. SMI Discounted Cash Flow as at Jan 2026Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Santana Minerals for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 880 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.  Build Your Own Santana Minerals Narrative If you see the numbers differently or want to stress test the assumptions yourself, you can create your own view in just a few minutes: Do it your way. A great starting point for your Santana Minerals research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision. Looking for more investment ideas? If you are serious about finding your next opportunity, do not stop at a single stock. Use the screener to see where the data is pointing right now.  Spot potential value by checking out these 880 undervalued stocks based on cash flows that could offer more for every dollar you put to work. Ride powerful tech trends by scanning these 26 AI penny stocks that are tied to artificial intelligence themes. Target income potential with these 12 dividend stocks with yields > 3% that might suit a yield focused approach.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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