future earnings

Lets have a rundown of NST's valuation.


Fully Diluted Market cap of 124 million at 33 cents
Cash at bank : 10 million


Now we should probably discuss earnings.

Last quarter they had total revenue of $40.5 million with 30,209 ounces sold.

Thats an average gold price of $1340 AUD an ounce and gold has recently broken $1400 AUD an ounce.

If they had four quarters of this that would be roughly 160 million revenue off an average price of $1340 an ounce. This will increase depending on the gold price. Say the total expenditure costs for the year are at $550 an ounce then we should clear an estimated 95 million before tax. I feel this is reasonable considering recent total expenditure costs for the prior quarter were $478 an ounce.

Tax at 30% flat rate means NPAT is going to be roughly 65-75 million depending on what our average gold sale price is. I'm not sure on tax losses to be carried forward so I wont go into this. If there are tax losses to be carried forward then all the better for NST.

At 70 million NPAT that is an estimated PE of 1.375

Recently our JV partner reported further good results from Mt Clement which we share a 20% interest in. This deposit is a high grade gold, silver and copper deposit. NST have the only processing plant in the area so It has created more certainty that the Paulsons processing facilities will keep running even if the mine gets depleted in future. IMO it all looks very promising. Just need to decide when to exit.

All in all NST looks great based off current and future earnings but future earnings post 2011 depend on current exploration success within Paulsons. If this comes through with further positive results then I highly doubt the SP will stay at current levels.

Feel free to pick me up on anything thats not correct.