let's start again:110k oz per annum productionFlat forwards of...

let's start again:

110k oz per annum production

Flat forwards of $AUD 1000 per oz as per Pre-feasibility

Revenue $110m

Production cost of $AUD585 per oz, let's say 20% blow out in cost equals $AUD700

$77m in production cost

Gross Margin $33m

Less Depreciation, Interest and overheads of another

Dep on $45m plant @ 20% to be conservative = $9m

Interest on loan @ 8% first year because after that it is a reducing balance = $3.6m, overhead of another $2-3m is still about $17.5m net profit, divide by 300m shares is earnings of 5.83 cents per share. Earnings Multiple of say 10 times ( close to other miners) and you have a share price around 60 cents per share.

Pay back would be 2-3 years and probably better because you can bet the Chris Cairns will have a lot of cost control measures in place and you won't get the 20% blow out in cost.

If i take the $AUD585 per oz cost as per feasibility then :

$64.3m in production cost

Gross Margin $45.7m

Less Depreciation, Interest and overheads of another

Dep on $45m plant @ 20% to be conservative = $9m

Interest on loan @ 8% first year because after that it is a reducing balance = $3.6m, overhead of another $2-3m is still about $30.1m net profit, divide by 300m shares is earnings of 10.03 cents per share. Earnings Multiple of say 10 times ( close to BHP or RIO ) and you have a share price around $1.00 cents per share.


I am sure that the numbers will stack up. I am sure that in 2 years we will be looking at a gold stock at closer to $1 per share than 20 cents and I am sure that that sort of profit will be funding an agressive exploration program that will give you another 5 years of production or an increase in the oz's produced per annum.

Which ever way you look at it, we are looking at a butt kicking stock.

Regards

kojasper