Whilst I know this post is not meant to be misleading & was posted for all the right reasons, posts like this can cause some harm with potential educated investors. Most educated investors would know applying a P/E ratio of 7 to a assumed mine life of 7 years is not logical, because at end of 7 years there is nothing left. P/E analysis is based on the ability to continue to generate cashflow year in & out, not just for 7 years. Discounted cashflow models are far more appropriate, due to the nature of the cashflows with mining companies.
AAR requires one DCF model based on assumed gold reserves & productions at Mandilla (could only be a conservative estimate on known reserve, given we don't know upside yet) & another DCF model based around Koongie. By combining both with various assumptions on metal prices & production costs discounted at an appropriate discount rate we then have some real figures to apply. Whilst I am not going to supply such a model because I have done my own very rough calculations in my head, it is worth learning how to set up a good Excel spreadsheet with all the relevant factors such as production levels, grades,prices, costs, discount rate, exchange rate. Once you have such a model, can apply to nearly any mining project to identify its true value.
Please take the above comments in a positive way as the more you are prepared to learn, the more successful not only your modelling but your investing.
Unfortunately, the current market has produced a lot of one line expert posters who will pay the price for their inexperience in identifying what is real value from hype.
Regards
Buffett
Good luck to all holders
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10.5¢ |
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Mkt cap ! $98.19M |
Open | High | Low | Value | Volume |
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Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
3 | 402668 | 10.5¢ |
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Price($) | Vol. | No. |
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11.0¢ | 410000 | 4 |
View Market Depth
No. | Vol. | Price($) |
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3 | 402668 | 0.105 |
7 | 589078 | 0.100 |
1 | 500000 | 0.099 |
3 | 107856 | 0.098 |
1 | 102040 | 0.096 |
Price($) | Vol. | No. |
---|---|---|
0.110 | 410000 | 4 |
0.115 | 259000 | 5 |
0.120 | 887116 | 6 |
0.125 | 273913 | 4 |
0.130 | 573507 | 8 |
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