assume 1860 mil shares on issue. unhedged pog = $630 and cost =...

assume 1860 mil shares on issue. unhedged pog = $630 and cost = $250, so profit = $380 cash flow = AUD 500 times 830 KOz = 415 mil pa = 22c ps cash flow x PE = 15 = $3.39 value, discounted by 15% to $2.88 NPV.

so l reckon that without the hedges current value = $2.88 assuming average price received $630 over next 12 months and costs = $250 US.

Future expansions and BGF etc are more than 12 months away so would omit them from current valuation but they are worth something. on the other hand lots of operational risk and pog risk, so my valuation stands as "vaguely right" as opposed to "precisely wrong". Of course price will vary around that price, say 70c for a 25% volatility, so the range is $2.20 - $3.60 over the next 12 months.

comments welcome, please put your thinking caps on!