norton gold - running the numbers

Hi everyone,

I have been doing some research into NGF over the last couple of days and have come up with a conservative EPS of 2.9 cents per share for FY2011.

This is based on the following assumptions:

155,000 oz mined (The lower end of the company's estimates which range between 155-160,000 oz)

Gold Price of $1,300 (the figure contained in their roadshow presentation and less than the current trading price of Gold)

A mining cost of $924 per oz (as per the roadshow presenation).

This would give an income of: $201,500,000
Cost of mining: $143,220,000
I have then taken previous years costs (admin costs, etc) as a % of sales to work out a profit of $19,733,000.

Their half year profit before tax(as per the roadshow presentation) was $12.6m, so I think $19-$20m for a full year result after tax could be around the money.

The thing I would like to clarify to improve my modeling is:

1. Is their likely to be any hedging losses or impairments from the financial derivatives? Or would it be safe to say these have all been accounted for in FY 2010?

And on another note:

2. What P/E ratio do you think is appropriate for the company going forward?

and 3. Has anyone else done some projections, if so how do your figures compare.

Thanks for your feedback



Please Do Your Own Research, I am only an amateur so do not rely on my figures. As always please seek independent financial advice.