hi mango, I've outlined the timeframe for my announcements in my previous post.
next to come is revised resource estimate within this month, unsure as to what date precisely.
I'm more interested in plant commissioning, which for me is the next big SP driver.
Just thinking out aloud here, this is my hypothesis regarding short term price target for SBL.
Assuming no further appreciation in the gold price I would say a P/E of 5 is fairly conservative for Year 1 given the embryonic stage of the operation. This would translate to a MC of 18.2 * 5 = 91M. Add another 13M in cash and we are looking at roughly 104M.
Lets add inground resources. We are currently sitting on 1.27mOz@a IGV of $25/oz. This equates to 31.75M. I want to apply a further discount of 80% to allow for downside risk and the fact the market is not ready to apply value yet to the exploration assets. So we'll go with 6M.
My conservative valuation stands at 110M market cap come January.
Current Market Cap 38M @ 0.027 My 3Month Target 110M @ 0.078
Sidenote: For Price/Earnings purposes it is difficult to compare a company initially using tailings vs a mining operation which almost all ASX goldies are. The best example I can find is recent junior gold producer, Integra mining.
IGR achieved first pour in September. Currently sitting at a Market Cap of $450M for expected rampup of production to 90000 ounces/annum. Additionally, their cash costs are $574/oz which is not far off our expected cash costs of just over $600/oz.
SBL Price at posting:
2.8¢ Sentiment: LT Buy Disclosure: Held
