So if the market values the current resource defined so far along with the fact we’ve got an operating plant and given the current gold price at a share price of 4.5c, my opinion, based on the below arguments, are that it’ll see 8c come Xmas.
1) They’ve only explored 10% of Jaurdi which has already shown it has 160,000oz JORC’d, confirmed gold hits at spots around the tenement when drilling for water and the current resource proves the initial expectations of gold along the paleochannel. So my conservative estimate based on those facts is that we’ll find another 300,000oz of mineable shallow depth resource. My actual guess is that we’ll see 400,000oz and who knows, it could be much more. The JORC of the initial 160,000 took only 2 months from initial drilling, so seeing as we started drilling a couple weeks ago, I think by Xmas we could have another 300,000oz JORC’d up.
2) Stockdale is yet to be drilled and looks very promising. For this calculation, let’s assume a conservative approach and assume we find nothing. Who knows once again what could be in this though as soil anomalies are looking good, so for all we know, we could have another 200,000oz plus there.
3) Throughput is 20% higher than PFS so instead of taking 5 years to get through the current resource, we’ll only take 4 years! Recoveries are at 90%, which is 5% higher than the PFS originally estimated. Both of these are huge when it comes to getting the most out of the current and future resource. This means our AISC will go from an already tiny value of $870/oz to under $800/oz at least.
4) Gold price is already sitting at $2200, which $550 higher than what the PFS assumed. Compared to the current AISC of less than $800/oz that’s a ridiculous profit of $1400/oz. Given the recoveries and throughput, we’ll be seeing at least 32,000oz a year which equates to a profit of $45mil per year! At current the market cap, we’re sitting at a P/E ratio of a minuscule 2.7 times. A conservative value for a short mine life producer from my experience is anywhere between 5 and 15. So just that alone means we’re underpriced by between nearly 100% and 650%!!!
So taking in all that and if the market values the current resource at 4.5c and we’ve got 160,000oz currently, an increase of 300,000oz could quite easily give us a share price of 8c. Then if we hit more than my conservative estimates at Jaurdi and also some at Stockdale, we could quite easily see 15c and above come mid-2020.
Please let me know if you think any of my 4 points above are unsubstantiated or exaggerated. If not, you obviously see just like a lot of other long term holders here that we’ve got a loooot more for this to run before we get close to seeing the full value of this share. DYOR
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