Thought it would be worth revisiting the numbers. The following calculations assume full option dilution, and include full debt repayments to Cartesian Royalty Holdings.
Here are my assumptions:
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
| 1 |
Revenue calculation |
|
|
Costs calculation |
|
| 2 |
Processed tonnes per day |
500 |
|
Total cash cost per ounce |
600 |
| 3 |
Processed tonnes per year |
120,000 |
|
AISC per ounce (1.5x TCC) |
900 |
| 4 |
Grams per tonne average |
15 |
|
Total costs per day |
$ 173,614 |
| 5 |
Au grams per day |
6,000 |
|
Costs per month (AUD) |
$ 3,472,278 |
| 6 |
Troy ounces per day |
193 |
|
|
|
| 7 |
Monthly ounces (20 days) |
3,858 |
|
Free Cash Flow per month |
$ 3,061,738 |
| 8 |
Annual ounces |
46,297 |
|
Free Cash Flow per year |
$ 36,740,857 |
| 9 |
Price per troy ounce (US) |
$ 1,321 |
|
Total Revenue |
$ 78,408,193 |
| 10 |
AUD per US |
$ 0.78 |
|
Annual revenue (inc. debts) |
$ 54,559,034 |
| 11 |
Price per troy ounce (AUD) |
$ 1,694 |
|
Annual FCF (inc. debts) |
$ 4,941,978 |
| 12 |
Dore purity |
80% |
|
P/E ratio |
5 |
| 13 |
Revenue per month (AUD) |
$ 6,534,016 |
|
Price |
$ 183,704,283 |
| 14 |
|
|
|
Share Price |
$ 0.16 |
Some things to keep in mind:
The cap raise announcement stated that funds would be used to ramp up monthly ounces to 5,000 by year end. Obviously, the ability to reach 5,000 is highly dependant on average grams per tonne. In the above, I have used 15 g/t, which is well below our average so far of 36.17 g/t. For clarity, here is the same calculation as above using differing grams per tonne values.
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
Column 8 |
| 1 |
Grams per tonne |
10 |
15 |
20 |
25 |
30 |
35 |
40 |
| 2 |
Share Price |
$ 0.11 |
$ 0.16 |
$ 0.20 |
$ 0.25 |
$ 0.29 |
$ 0.34 |
$ 0.38 |
You should notice that annual processed tonnes are at 120,000. This is in excess of the 50,000 currently enabled by our exploration permit. I am assuming we will be able to move to a full production permit without too much difficulty.
Dore purity is at 80%. This is an unknown factor, and at this stage is purely an assumption. If anyone has extra data here I would appreciate it.
The gold price of $1694 AUD is slightly too low, current figures at $1750.
The Price to Earnings ratio here is a major determinant of share price growth. I have used a multiple of 5, but multiples of up to 15 are not only common but are also likely as the project is increasingly de-risked.
In addition to all this, don
’t forget the exploration potential of our other tenements. You will notice a vast array of pure exploration plays on HotCopper with similar market caps to OGX. Right now, I don
’t believe the exploration potential of our tenements has been priced in at all.
Cheers,
Atlas
