Some comparative statistics between NCM and PRU.NCM MC 25...

Some comparative statistics between NCM and PRU.

NCM

MC 25 billion

"For the financial year ended 30 June 2011, Newcrest produced 2.7 million ounces of gold at a cash cost of A$493 per ounce and 75.6 kilo tonnes of copper. For 2011-12, Newcrest is targeting gold production of 2.775 – 2.925 million ounces and copper production of 75 - 85 thousand tonnes."

"As at 30 June 2011, it had gold reserves of 80.0 Moz and copper reserves of 8.36 Mt and gold resources of 147.5 Moz and copper resources of 19.9 Mt."

PRU

MC 1.4 billion

"Our Edikan Gold Mine (EGM), formerly referred to as the Central Ashanti Gold Project (CAGP) and Ayanfuri, has 5.3Moz of Measured and Indicated gold resources, including reserves of 3.3 million ounces of gold, and 1.78Moz Inferred gold resources.

A further 1.4Moz of Indicated gold resources, including 0.66Moz of Reserves, and 0.52Moz of Inferred gold resources are held on our other West African projects (Grumesa and Tengrela).

We started production from the Edikan Gold Mine in Ghana in the 3rd Quarter of 2011. If proven economic by the current feasibility study, the Company is targeting production at Tengrela, Ivory Coast, by the start of 2013."

Production is aiming for 200,000 ounces per annum with cash costs $550 from Edikan. 2013 Tengrela should be producing 200,000 ounces at a similar cash cost.

They are continuing to drill for resources. It is highly likely that every two years they will define and build another 200,000 ounce per annum mine.

Extrapolating, we have a 600,000 ounce per annum producer in 2015, 800,000 in 2017. MC could be either 4 x current MC, or (0.8 mill/2.7 million) x 25 billion.

5.6 billion - 7.4 billion.

Then throw in some gold price extrapolations for 2017, looking at the ten year price graph of gold, if it follows the trend, it could easily be double today's price, 3600 an ounce. Will this mean a doubling of the market cap of NCM or a corresponding double of PRU?

11.2 billion - 14.8 billion, which is closing in on 10 times today's price.

There are alot of what if's and maybe's, but PRU have solid management, they keep to timelines and they have excellent ground. Have a look at what the 10 year price graph of NCM looks like. This is what PRU may do.

It is exciting to follow and trade the likes of PVM, GMR, GOR or whatever other gold speccie floats your boat, but PRU have a very good chance of being a ten bagger over five years. After writing this up, I think I will put some funds in the ring.