I appreciate your comments...and admit they are valid points...I guess that is why the price is still trying to find an equilibrium.
As for the treatment of the options, by your own words, "ignoring" them will have the effect of reducing shares on issue in the calculations, which would have the effect of actually increasing my "back of envelope" figures.
Revised figures "ignoring" options...
Total annual income: AUD$38.4m (at current gold/AUD$ prices)
Total annual costs: AUD$29m
Profit: AUD$9.4m
EPS: 6.3 c/share
Using a multiple of 7 times earnings...(given minimum of seven years production remaining)...gives a figure of: 44.1c per share.
Now add: 1. Growth potential...evident from recent drilling results. 2. Cash at hand of $4m (2.7c/share) 3. Value of existing tenements. 4. Value of property, plant, etc...etc...etc.
Given all the above, I now see "fair value" being somewhere over 47c/share.
Cheers!
LEG Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
