The error is corrected.
There is significant upside in the EGA resources and the reserve upgrade by 20% demonstrates it.
The $0.40 offer is opportunist and cheeky.
Once in full production and using cashflow to fund exploration they should be able to comfortably extend mine life. I sat in a presentation watching management say how great the resource and the upside is ...
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This is just laziness by management to finance the project themselves, and gold projects are easier to fund than many other types of resources.
On the subject of P/Es ... just picking a few off the top of my head and looking them up I get an average of 30.0. Sentiment is strong for gold stocks at the moment.
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So using a P/E of 10.0 is fair once they are in full production ... and is sufficient to account for dilution from any equity that would be required as part of a financing package. But gold projects are in a good position to achieve a high ratio of debt-financing.
Revised target $1.67 ... still represents significant upside.
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