lukesdd, page-7

Hainholz and EL,

I know I say some bold statements haha. But this is how I look at risk/reward (very rough idea how much upward pressure on SP over time).

Monarch is it?

They have a target of 500,000 oz of gold pa in 2009.

With much assumption>
500,000oz x US$750/oz=$375 million USD.
$US375M x 1.2 AUD/USD= $450 million AUD (revenue pa)
Profit margin (assume 20%)= $90 million net profit.
417.2M shares outstanding = roughly $90M/420M
¬$0.2.... that is EPS of about 20cents.

A very rough way to value a mining company is just to times the EPS by 10 to get SP... this method usually gets 30% error to most mining companies (which i think is accurate enough to see if you have a '1 bagger' or five).... AKA $0.2x10= $2 SP.

So with massive rounding and assumptions... and error of 30%... I would say Monarch is worth about $2 in 09'.... BUT in 07/08 they aim to get 125000 oz which i put down as a SP of 50c using the same technique..!!

So recap, i say roughly SP of 50c in 07/08 and 2$ in 08/09/2010... So assuming they reach their targets (which has risk in itself) this is not a bad compnay to look at. I might consider it later down the track.

What do you think guys? Am I that flawed?