The below is highly speculative. No specific financial advice is intended.
Prompted by a tweet, thought I would speculate on where the GOR share price could be in 2028.
Gold added about 400% between early 2004 and early 2012. So what if history repeats?
Let's assume that by 2028:
- GOR double attributable production to 300 koz pa ( 300 koz pa is a stated goal in their strategy )
- Fully-diluted share issue increases by no more than 20%
- AUD gold price increases by 200% to 400%
- Cost of production increases by 50% (assumption here is that in a booming market, exploration and production costs will increase)
- Depreciation and amortisation at 7% of EBITDA
- P/E in the 20.0 to 35.0 range due to sentiment in a booming gold market
So what are the results? Well, if my assumptions are on the money then we will have a 25 to 30 bagger (based on the midpoint of my analysis).
In this scenario, GOR would be cranking along at a Gross Margin of 80% to 88%.
We also had this tweet - sprott highlighted that Gold stocks went up 1700% in the 2000 to 2011 period.
(20min delay)