valuation

Another goldie to value...

CAPITAL STRUCTURE (AUD):
Shares outstanding: 245.6million
Options ": 14.4 million
Market cap: 600 million
Net cash position: 68 million
EV: 532 million

OPERATIONS:
Resource + reserves: 4.5 million ounces
Plant upgrade ~ 50million capex underway completion early 2012
Good exploration upside (large tenements)
Annualised production: 140, 000 ounces (up to 200,000 in 2012)
Hedging: 221,000 ounces at ~ 900 USD up to 2013 (40% production)
Other- tax-free holiday to 2015

FY11 estimate (USD):
POG: 1450/ounce
Ounces produced: 140,000
Average price received (incl hedging): 1230/ounce
Cash costs: 775 ounce
Operating margin: 455/ounce

Free cashflow: 63,700,000
Capex: 60 million (essentially all surplus cashflow)
Tax: N/A

Using 10% RR- gives ~ 2.67/share (AUD)
Using 12% RR- gives ~ 2.27/share

FY12 estimate:

Ounces produced: 200,000
Average price received 1230/ounce
Cash costs: 600/ ounce
Operating margin: 630/ounce

Free cashflow: 126 million
Capex: 22 million

Using 10% RR gives ~ 5.31/share (AUD)
Using 12% RR gives ~ 4.47/share

COMMENTS:
Significant exploration upside & development upside, excellent cash costs and cashflow positive. What I really like is the cost per tonne milled of $15 USD/tonne- this is VERY VERY low, and has stayed VERY VERY low over 12 months. Will be interested to see how they actually bring down the operating costs in FY12 (though I suspect it will just be due to increased throughput). Excellent undervalued gold producer (with 100% upside through to 2012).