According to Baker Steel Capital Management who have analysed numerous past and future gold projects there have been fairly consistent ratios we can use in valuing a gold mine.
1. The Capital cost of a new gold mine is around 10% of its gold reserves
2. Mining the gold costs around half that gold
3. The ongoing capital requirement to keep that mine going costs about 5% of that gold
4. Governments end up taking around 15% of the gold in taxes.
The balance of 20% is usually left for the shareholders.
So, taking 20% of Alacers Measured reserve of 10.5 mill oz = $2.1 Mil oz for the shareholders at lets say $1700/oz = $3,570,000,000 divided by fully diluted shares of 292,000,000 = a share price of $12.22
Lets give this a 30% haircut for middle east risk and sovereign risk of being in Turkey gives a fair value of $8.55 so IMO at current levels this is a buy and that is why I have put my money where my mouth is an picked up $70K worth. Would love some feedback on my analysis
- Forums
- ASX - By Stock
- AQG
- lets get our head around valuation
lets get our head around valuation
-
- There are more pages in this discussion • 31 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)