early days yet..., page-16

crassus1...

Loosley, somewhere north of 40c...but that's not to say it will get there in a hurry.

Following is my original post...

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I am putting a value on LEG of over 40c...

How I arrived at my back of envelope figures...

Shares on issue: 180m (approx)
(after placement and assuming conversion of options)

Current cash: $10m
(including cash from placement, converted options and cash on hand, less final payment to Abelle...)

Production: 70,000 ounces/year (costs AUD $345/ounce)

Resources: 515,000 ounces (not including recent discoveries)

Annual admin/operating costs: $2m

Annual exploration expenditure: $2m

Miscellaneous: $1m

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From above figures...

Total annual income:
AUD$38.4m (at current gold/AUD$ prices)

Total annual costs:
AUD$29m

Profit:
AUD$9.4m

EPS:
5.2 c/share

Using a multiple of 7 times earnings...(given minimum of seven years production remaining)...gives a figure of:
36.4c per share.

Now add:
1. Growth potential...evident from recent drilling results.
2. Cash at hand of $10m (5.5c/share)
3. Value of existing tenements.
4. Value of property, plant, etc...etc...etc.

Given all the above, I see "fair value" somewhere over 40c/share.

I will be the first to admit the loose nature of my figures, so I invite people to point out where I have got it wrong.

Cheers!

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Cheers!