still undervalues at a pe ratio of 4

Hi all,

Just wanted to share my quantitative research

- We now have 1,270.4m shares (inc options) on issue & approx $165m in cash & receivables. Equates to 13c cash/share

- Modder East will produce roughly 120,000 ounces @ $472, while Rand produced roughly 163,000 ounces @ 1,222. So we have weighted average product costs of roughly $900/oz

- Rand production costs are expected to fall to below $400/oz in 2016 (due to uranium credits)

- Selling 300,000 ounces @ $1,500/oz gives us $180m p.a. Less interest costs for the Rand acquisition of ~$15m ($210m @ 7% [approx junk bond rate for USD borrowings])leaves $165 in net profits

- equates to EPS of approx 13 cents, or a PE ratio of ~4x earnings. This reduces to a PE ratio ~3x if you take out the $165m cash.

- The Chinese have the right to purchase up to 188.6m more shares @ 53c if they can't buy enough at 55c. Though given the share price is below these rates, I can't see this happening.

- We still own 71% of Goliath (i.e. 71% of 13.46m oz)

In my mind this company is still very cheap relative to its peer group, specially when you consider we have falling production costs and increasing production volumes over the next few years