The margin just keeps getting better and better with the price of gold in AUD.We will probably have a few more corrections on the way but overall the trend is up and inflation is now really starting to rear its head world while which is bullish for gold.I don't know what the POG will do over this year but could easily be higher than $1000USD in the 2nd half of 2008.If it did manage to get to say $1200USD(equates to about [email protected] to USD)then thats a margin of about $900(cash cost@$450).Mutiply that by 120,000 ounces(could even be more)and thats $108mil profit!Very nice indeed.
I think there are 376mil shares and nearly 34mil options so about 410mil in total.Divide 108mil by 410=0.26c@share at 8yrs mine life = SP@approx $2.10.My maths may be wrong so please correct me if so. At todays numbers(say a conservative 100kounces,margin of $1040-450=$590*100k=$59mil.Divided by 410mil=0.14c@share*8yr mine life=$1.15.At present its only being valued at a forward PE of approx 3.5 with very low risk as its a pure Aussie gold play.On these numbers its got a lot more upside.
Anyway a number of people have been saying that IGR could well be worth $2 and I think our time will come some time over the next 12 months.At the moment IGR is still undervalued and I thought by now it would be much higher but underestimated the turbulence of last week.Its my guess now that the SP will continue to lag its true value for maybe a few more months until the market settles unless we get some great drill results in Feb.
I just spoke to Peter Ironside who told me the "guys who really know say that reserves and resources are far more important than being in production".Which highlights why management have pursued their aggressive exploration strategy.If you're in production but not finding anymore ounces then your SP will just stagnate.With IGR's timetable they are aggressively looking for more gold and should be close to production as the POG is more than likely much higher than now I think.
I also asked him about Borthanna and he said that there should be an update in the quarterly due out next week as long as they hear from Barrick.With regards to drill results he couldn't say at all.If there is something good to be announced from Barrick then it will no doubt catch everyone by surprise.
Lets hope a TOver if one ever appears doesn't come until the SP is well north of $1.But like KL said,thats out of our hands.
Cheers Tigerpen8
PS. KL still haven't heard from you.
IGR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
