Base on their quarterly report this week, they're going into production at the end of February 2007 and the cost of gold for the Menzies project is A$ 432/oz and their estimate sell price is A$ 750/oz which work out to be a net profit of A$ 318/oz and the current Menzies optimised reserve is 35,304 oz which equate to A$11,226,672 net profit. That's very good for a company with 33.6M shares and a market value of only A$6.2 at the moment.
Their estimate gold price of A$750/oz is cheap compare to the current gold price of about A$852 which would make their net profit of A$14,827,680.
Their total resource statement for the 5 projects Eucalyptus, Menzies, Mt Korong, Yerilla, and Malcolm is now stand at 503,350 oz. Assuming their cost per ounce to be the same at Menzies at A$432/oz and gold price at A$750/oz (not A$852), they're looking at a net profit of A$160,065,300. That is huge.
The quarterly report also mentioned a number of parties are knocking on their door for a joint venture.
All sound too good to be true ? So much appreciate if anyone can read the quarterly and advise if my calculation is wrong.
I can't help thinking today trading is just a trick to make the share price look weak so they can buy up the options and share. The options traded for the first time today since listing a few weeks ago. Someone put a lid on the share price by offering 150,000 shares at 18.5c. This probably the biggest single offer I seen on RER for a while. Anyway soon after that they sold just 12 shares down to 16c and panic options sellers sold their options but only 10,000 shares traded at 16.5c after that. The closing bid is 18c and the large offer is still showing at 18.5c.
Not a bad trick to pick up cheap options and stocks before production at the end of this month. I am hanging on to my and might even pick up a few more.
NZC Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
