3-4c rerating is upon us, page-10

Oh, thanks Mowibble. Your's too. Its easy to post however when the value is starkly obvious.




I recently compared TAM to EXM for my own interest and my own due-diligence. Really, just to help me determine how many million EXM i buy. lol


Came out with the following:

NOTE: Very back-of-the-envelope calculations and they were to my benefit/assistance/due-diligence only.

I need to factor in EXM future equity raisings/debt issues, but the value was so obvious i thought i'd save that for a rainy day. lol




TAM:


Shares on issue: 3,538,390,059

Mkt Cap @ $0.065: $230,000,000 = $230mn


Tanami Region of Northern Territory. Region hosts resources in excess of 11mn ounces of gold.

Area very isolated (negative) but largely unexplored (positive) given its isolation.


TAM targeting 50-70,000 ounces per annum. Open-Pit.

2009 production from open-pit operations: 23,320 ounces [147,000 tonnes at 5.1g/t]

2009 FY loss: $21mn.

Loss per shares = $21,000,000/3,538,390,059
= $0.0059
= 9% of the current shares price


Current gold price around $1010 USD.
$1010 USD = $1010/0.88 = $1,150 AUD

Lets say they produce at $700 AUD per ounce.

Margin = $450 AUD

Target: 50-70,000 onces per annum


Profit (Gross from open-pit operation):
= $450 * 50,000 ounces
= $22,500,000

Profit (Gross from open-pit operation):
= $450 * 70,000 ounces
= $31,500,000


Say, PE multiple...?...8. Would say 6, but i'll give higher to account for exploration upside.


Target Price at 50,000 ounces per annum

$22,500,000 * 8 = $180,000,000

Per Share Value attributed: $180,000,000/3,538,390,059
= $0.051
= 5.1 cents per share (cps)

Target Price at 70,000 ounces per annum

$31,500,000 * 8 = $252,000,000

Per Share Value attributed: $252,000,000/3,538,390,059
= $0.071
= 7.1 cents per share (cps)


DISCOUNTS:

- Current mkt conditions.
- Run up already
- Risks: financing, operational, currency, commodity, general market

..........................................................................







EXM: Excalibur Mining


Location: Tennant Creek, Northern Territory

Shares on issue (<3cents): 2,583,649,231

Mkt Cap (@1.5c): 2,583,649,231 * 0.015 = $38.75mn

Mkt Cap (@3.0c): 2,759,662,083 * 0.03 = $82.79mn


2008/09 FY Performance:

Loss: ($2.30mn)

Cash: $1.69mn + $10mn (Bell Potter Placement)
= $11.69mn

Cash Per Share: $11,690,000 / 2,583,649,231
= $0.0045
= 30.16% of the current share price

Enterprise Value: $38.75mn - $11.69mn
= $27.06mn
= $0.0105 cents per share



Major Projects:

- Nobles Nob
- Juno
- Rising Sun


Resource Base:

3.6mt @ >10g/t = 1.17mn Oz gold

At $1050 AUD Oz = $1,228,500,000 IGV of GOLD



Costs: Per Ounce Production/Opex Costs

$325 per Oz

@ $1050 AUD gold price = $725 AUD margin per ounce


Gross Profit on 1.17mn ounces at $725 AUD margin
= $848.25mn AUD


Targeting Annual Production of: 80,000 - 140,000 ounces pa

Lets use say, 80,000 pa at $600 margin. $600 margin (as opposed to $725) gives $125 leway for a) gold price falling b) AUD rising

80,000 * 600 = $48,000,000 profit per year!


EPS (estimate) = $48,000,000 / 2,583,649,231
= $0.0186


Say, PE = 6-8:
PE 6 = $0.1116
= 11.16cps

PE 8 = $0.1488
= 14.88cps



Trading/Regiser Dynamics:

Top 20 = 25.40%; very low; symptomatic of it been a trading stock
Obviously changed with Bell Potter placement



Time-Frame:

- Resource definition, funding, planning, drilling for next 18months

By end 2010, decision on mining.


- Juno the major operation.

Before Juno comes on line, the company plan to mine open pit Nobles Nobe + Rising Sun for early cashflow and to re-allocate that cash flow back into Juno ramp up.


Juno: 1.1mt @ 18.68g/t for 661,488 ounces of gold.

Looks to be an excellent resource.

Initially open pit. Long term potential exists to later on go underground.