Shares outstanding: 262 mill Options (out of the money): 8 mill
Convertible notes (out of the money) [IE debt]: 153 million Other interest bearing debt: 60 million Cash: 194 mill
Market cap @ 2.37= 621mill EV= 640mill
OPERATIONS: Resource + reserve: 10 million ounces (exploration upside) Operations split Macraes/ Frasers/ Reefton Dipidio to be commisioned Q4 2012 (funding from cashflow, not capital markets) Dipidio- game changer, negative cash costs with bi-product costing
EARNINGS: Currently: 260000 ounces at US 650/ounce cash costs
FY 2011 estimates: Assuming POG 1450 Operating margin: 800 Operating profit: 208,000,000 Less D&A: 60,000,000 (Capex will be almost all of surplus cashflow- so will be ignored). Tax: 44,000,000 NPAT (USD): 104,000,000
At a 10% RR- gives value of 3.90/share = 3.65AUD At 12% RR- gives 3.24/share = 3.04 AUD
End of FY2013, with Dipidio online and POG still at 1450 (with D&A approx 30 million) gives: NPAT (USD): 185,000,000
10%RR value of 6.61AUD 12%RR value of 5.51AUD
Either way significant upside if Dipidio is delivered on time and on budget. This company has fantastic metrics, I am only waiting to see if they can maintain their low cash costs with rising input costs and USD inflation before sinking my teeth in. Good luck to all holders.
OGC Price at posting:
$2.36 Sentiment: LT Buy Disclosure: Not Held