For people interested in producing gold companies, and Norton Goldfields in particular, I hope this analysis may turn out to become valuable.
Excerpt:
"Norton Goldfields (NGF) Revaluation Imminent A Fundamental Value Case Ready for Turn Around with Very High Upside Potential
A comparison between Norton Goldfields, Oceana Gold, New Gold, Semafo, Gammon Gold and Jaguar Mining gives some very interesting result. Based on a 150 USD/oz value of P&P and M&I in ground, this gives a target of 1,65 AUD/Share, a 569% increase, from the current AUD 0,29 in the Norton Goldfield case. Norton is priced less than 3 times (Oceana) and even less than 15 times versus other peers in this regard, way to low also considering cash cost/oz production.
With gold at 1100 USD/oz, a head to head Market cap/EBITDA ratio comparison also shows Norton is priced way to low in comparison to peers. In comparison with best in group competitor Oceana Gold, Norton is priced at 61% of Oceana Gold 2010, and after adjustment for cash and debt (i.e. EV), Norton is priced at 38% of Oceana Gold.
In calendar 2011 and 2012, Market cap/EBITDA shows Norton is priced at 81% and 72% respectively, and after debt and cash adjustment (i.e. EV) Norton comes out priced at 51% and 45% of Oceana. This, with a CONSERVATIVE, author expected total cash cost in the Norton case. (Further sensitivity analysis, please see detailed comparison below)
Worthwhile to mention is that the other peers in this comparison all come out worse versus these two outstanding Gold Companies.
In addition, the calculation above includes the annual gold hedge of 70koz in Norton, which MIGHT be cancelled out, if counter party Lehmann Brothers remains in administration, acc. to CEO presentation. This is an ADDED VALUE potential of Norton. In any case, Norton doesnt have to pay during the legal process, thus accumulating cash on top of above EBITDA analysis."
BR Mauta
http://mautastocks.solobis.net
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