It depends on the bond abrasion index and they won't know that until they do testwork on the ore. If the ore is super hard and WMC agreed today on a certain price, their management would be fired.
Anyways, just doing a quick back of the envelope calc based on the Corporate Presentation announcement from March, it seems this is still super undervalued now that we've locked in a toll treatment agreement.
Based on 34,000oz at $3500/oz gold price, they said they'd have $38.1M profits. So from the $119M revenue, that leaves them with $81M AISC (or $2,379/oz).
Applying that to a gold price of $5000/oz, we get $170M revenue, minus the $81M, we end up with $89M profits.
It'll cost about $10M to get into production and I'm sure WMC will want more of a cut given the high gold price, but even if the profits end up being $60M over the next 2-3 years, that's a pretty good return with very little risk for a $20M market cap.
Please critique my analysis by the way, would love to see if any of my assumptions are off.
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western gold resources limited.
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Last
8.5¢ |
Change
-0.003(3.41%) |
Mkt cap ! $19.55M |
Open | High | Low | Value | Volume |
8.8¢ | 8.8¢ | 8.5¢ | $18.37K | 216.1K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 124296 | 8.5¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
9.3¢ | 110974 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
2 | 124296 | 0.085 |
3 | 98342 | 0.082 |
1 | 24875 | 0.080 |
1 | 46680 | 0.078 |
3 | 463266 | 0.075 |
Price($) | Vol. | No. |
---|---|---|
0.093 | 110974 | 1 |
0.094 | 14250 | 1 |
0.098 | 59587 | 1 |
0.099 | 275000 | 2 |
0.100 | 203272 | 2 |
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