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Goldfarm

4,663 Posts.

293

03/12/23

19:19

Post #: 71244844
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Originally posted by MIStragic: ↑

Well the US$ POG is on a ' tear ' - up an extraordinary 1.57% to close to a new numerical high .... 2100 resistance looks tantalisingly close.
Of course the A$POG is up but 'only' a mere 0.87% to A$3103 - with key resistance of A$3200 (a new high) in view.
But this means that the cost of buying out those RED hedges just gets more expensive.
The cost = 285,047 x (3103-2551) = $157,345,944...... a takeover would have to pay out the hedging ??
285,047 over 3yrs = 95,015 oz per year .... assuming 215,000/yr production = approx 120,000 unhedged oz/ year for the next 3yrs.

For simplicity let's assume 50% hedged, and AISC 1800 & POG 3100 = margin on hedged oz's A$700, unhedged A$1300.
So rough FCF = 700x100,000 = A$70m + 1300x120,000 = A$156m ..... total A$226m per year till hedging closed.
From this debt must be paid down as first priority, then maybe some hedging, assuming no further unexpected costs ... but stuff happens in mining,
When fully unhedged then assuming all above metrics stay the same, then FCF = 1300x220,000 = A$286m.
Does this make KOTH such a cash cow that M&A will create 50c per share ... let alone $6 per share ???

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MiS - a number of commentators are predicting US$3000 gold in 2024. What do you think the RED share price would move up to?

RED Price at posting: 36.0¢ Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

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