re: valuations dont factor costs youre right stolwykjust off the...

re: valuations dont factor costs youre right stolwyk

just off the top of my head:

if they are worth $125/share in revenue over the life of project from given resource, then AFTER COSTS theyll be worth 125*30% net profit margin = $37.50/share

Now this $37.50 per share is revenue/share over entire life of mine

lets say they can produce 80,000 tonnes per year which is approx 20 years mine life

so $37.50 divided by 20 years is what theyll make per yr = $1.875

give it a P/E of 10 : so $18.75 value

BUT this is all based on 80 million shares, so we'll have to make an assumption for amt of shares they end up with

lets say they have 5 times the amt of shares currently (i.e approx 400 million shares )

so divide $18.75 per share by 5 and we'll get the EPS per year at P/E 10

= $3.75 per share

so based on :

80,000 tonne per year production
net profit margin of 30%
P/E 10
mine life 20 years
5 times the amt of shares

its got a $3.75 price tag

you can change the parameters above to get different values

the key thing is MONEY - theyll need plenty of it to get this up and going

****someone look over my figures as I couldve made an error???? Ive just done this on top of my head.

but if theyre more or less right, you guys hit the nail on the head by saying its still looking undervalued