OK at a margin of $600/oz those reserves on a non-discounted basis are worth about $150 million before capital costs, admin, royalties, A&D and tax. Then you have the value of the resources (yet to be converted).
Personallly I’d want to see the company prove that it can sustain those sorts of margins for a few quarters in a row before I would get interested. If they are high grading this turnaround story the margins will drop off and you’ll be back to square one. As I pointed out before, the completed stope areas on their mine plan looked like high grading to me, but I could be wrong.
The proof is in the cashflow as always. AISC are becoming more and more meaningless as many recent examples are teastimony of, including DRM itself who’s original AISC forecasts proved to be significantly out hence the need for a CR to pay off debt they otherwise should have paid with production from the mine plan.
If this is really a $600/oz margin mine then it is probably undervalued by some reasonable percentage (which I haven’t calculated yet) but we aren’t talking about multi bags or even one bag in my opinion (based on what they have at the moment ie the best case example). Esh
