I gave some feedback on this to a follower via twitter several months ago.
2014 = 264m for 209koz
2015 = 240m for 205koz
2016 = 214m for 146koz
Average = 1250/oz.
Add 5years of inflation. 1400AUD.
$1000aud margin on 150koz = 150M ebitda.
Post tax NPV ~ 1bn AUD = Current MC is 20% of NPV.
Good RvR if/when approval is granted and if AISC and Koz p/a is same. I'm aware that the plant is in C&M but given i haven't looked too much further but would be worth understanding what/are the capital costs for refurbishment to meet nameplate again.
Secondly as they rightfully point out your cutoff grade can increase. Post #:
56230985 for more info on cut-offs. But essentially lower grade material is now deemed economic thus overall resource can increase. That said, i imagine the plant throughput remains unchanged, and additionally you'd need to feed the same head grade as they were in 2014-2016 to get the same output. So yes lower feed grade is economical now, but won't produce the same output.
Anyways, a bit of a long winded waffle, but from my very cursory observations. It's around 20% NPV so i would suggest 5 times upside if and when it's in production producing the revenues I've quoted.
Post the approval, you become a very near term producer and usually i apply 60-80% of NPV. Why not 100? well you never know if you're going to hit the revenues projected. (recoveries, mining, cost increased, refurbs, extra capital etc etc). So I legitimately think maybe $2-$2.5 probably a fairish value post approval and then moving towards $4 once in production. My recommendation is if people are going to put out price targets in commodity spaces you probably want to underpin that with some economic science. Otherwise they're just vacuous numbers secondly, you've got limited understanding as to what needs to occur to meet those targets makes it very hard to track.
You can always make bull cases but i prefer to view conservatively and see if it stacks up. Which it does.
If you can present conservative cases and it stacks up, even in bear cases you break even.
That just my thoughts, I haven't done super deep DD as was always awaiting for concrete info on the approval. It's look promising for years on getting it, but goes to show how long you can have stagnant cash.
Irrespectively of whether i join the shareholder group or not, i wish everyone best success here.
SF2TH
(20min delay)