Takes into consideration a company’s future potential/earnings. For example VRX has a low build cost, and very long term resource. So potential is a long term profit, and considering the small build cost- there’s huge potential of earnings.
Then, there’s cos where the build cost and long term potential not quite there. I did make a little bit of cash on BCN, a goldie who has built and producing good profits- but its resource is limited. So share holders a bit hesitant that although co making good money now it’s finite.
Companies such as APT have terrific share price and their NVP is really high- as market has determined with its low share issue and future earnings it’s a darling!
VRX is in a niche market so hard to set NVP, as low costs to produce, fantastic product and long term reserves mean company has excellent long term value- therefore it’s NVP should’ve pretty good- other posters have suggested a value of 10 which is pretty conservative at this stage. But who knows- may be a flood to the market with every man and his dog wanting a piece of the action and there’s a flood on the market.
Personally I see 10 as being conservative as VRX is an early player- with quality product, low costs and readily available transport/rail/port access. Handy that Bruce recognised market and really targeted quality deposits with ease of movement.
Bring on production- and our NVP should be pretty strong!
VRX Price at posting:
36.5¢ Sentiment: Buy Disclosure: Held
