Share
555 Posts.
lightbulb Created with Sketch. 44
clock Created with Sketch.
17/03/18
19:58
Share
Originally posted by blister
↑
hey mate, welcome aboard. thats a tough question. ill work it this way to achieve 10c wed need an MC of 170million. lets assume a market multiplier for resources is x10... then we'd need to generate 17 million in bullion sales profit per year. the reason why this is at .007c is there is no jorc and no aisc... which would be laid out in a dfs which we dont have as a cost saving exercise as they have all the infrastructure they need so no need to shop around for capex investors. it was previously estimated morningstar was 910,000 ounces at 11.6 g/t...but we are driving a different approach
the best aisc ive seen recently are $900 an ounce. At $1600 oz AUDZ lets be generous and say $1000oz aisc given its pretty artisenal with targeted drilling. so to achieve 10c theyd need to produce 28,000oz annually. scale that to get 7c, 5c, 3c, etc. can they do this?
they have a 80,000 ton per annum processing plant which youd assume would be at capacity... now we have to assume an average grade 10 g/t. getting us a total output of 80,000 ounces per year... so a little over twice our 10c estimation. so at full capacity, with assumed aisc of $1,000... they could pump out to 20c... all subject to a change of any input data.
heres the reason we are so low, its all guess work til they actually start producing.
Expand
Blister - just to clarify your calcs. 80,000t per annum at 10g/t = 800,000g. This is equivalent to ~28,000 ounces.
Therefore at 10g/t gold at full plant throughput we get 10c a share with a PE of 10. Personally I would aim for a share price around 5c - allowing for some further dilution and a market capitalisation of $100M.
Nothing to sneeze about vs a current price of 0.7c!