if silver was us$100 today ...

I've started this thread because I don't want to downramp AYN by posting in a thread titled "Overvalue."

In that thread Helios suggested "Make no difference to SP if silver is $50.00 or $100.00 is not a producer yet..."

Personally, I find it hard to believe that people can post stuff like that and be serious. I guess it is based on the misconception that resources in the ground are worthless until mined. It's interesting how some resource companies are taken over for billions of dollars and yet they are not producers!

Novac suggested:

"If silver was $50 today, AYN would be 10c+
If silver was $100 today, AYN would be 20c+"

Now here's my guesstimate.

Producing 2 million ounces at $100 means income of $200 million minus costs. AYN has suggested A$13.50 an ounce. I'll be more than conservative and suggest after all expenses that is $30 an ounce.

That would leave us with $140 million clear before tax. Say $100 million profit. If we use a PE, which is not the way I normally value precious metals companies, but many people do, and using a PE of 10, which I expect would be well under the PE that AYN would be trading at, that means a market cap of one billion dollars.

With 1.3 billion shares on issue that would give us a price around 80 cents.

Remember - these figures do not take into account the supply demand equation. With silver at $100 I imagine there would be a buying frenzy for silver equities - and there are only a few listed on the ASX.