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Share
07/02/03
01:19
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HIG (Highlands Pacific).
Due to start production (fingures crossed) within the next 12/15 months.
Est. production of between 120,000/150,000 ounces pa.
Est. cash costs per ounce US$110/120 = approx. A$200.
Est. revenue received per ounce sold (based on current spot) = A$630.
Est. cash flows before interest interest expenses and taxes = 130,000 x $A430 = $A55M.
Est. interest exp $A5M.
Est. tax expense in initial 2/3 years (benifit of tax losses) = $A0
Est. Free cash flows = $A50M pa.
Current market cap. = 330,000,000 shares x 34c = $A112M.
Est. free cash flow multiple of 2x.
Est. free cash flow multiple assuming 30% tax on income of 3x
Est mine life of 7 years + !!
See the value here..?! I'm assuming production of 130,000 pa, and a gold price of $A630 --- which i consider to be conservative.
I've also assumed no further upgrades to reserves in future.
There is a lot of value in HIG still...
I reckon it'll be one of the best performing goldies over the next 12/24 months.
I've got my money riding on it !!
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