why is this gold producer undervalued

Hi guys,

As of Friday 20/02/09 North Queenslann Metals

MarketCap = $36M
Share price = $0.25
Shares on issue 145.5M
Cash in bank = $1.16M
Term security environmental bond $4.1M
Dividend declared $0.001 per share unfranked

Production

Production target from June 09 between 70-80.000 oz/pa
NQM share = 60%

Using lower end production of 70.000 oz/pa
NQM ( 60%) = 42.000 oz/pa

Gold price = A$1500/oz
hedged 33.3% oz @ A$1145/oz
Production cost @ A$654/ oz

hedged = 13986 oz x ( $1145 -$645) = A$6.9M
undhedged = 28104 x ($1500- $645)= A$23.6M
Total profit before tax = $30.5M
Profit after tax = $21.3M

EPS roughly around 14 cts per share.

( we have to allow some more costs for exploration and armortisation ect but this would probably under the $2M mark imho.)

The company has announced that production cost will come down as they continue ramping up production and have now changed from contractors to employing their own mining force.

They Pajingo mine has reserves for at least 6 years at the forecasted production target and manament is confidend of replacing reserves thru coninues exploration in this large and highly prospective gold tenement with a rich mining history in the millions of ounches.

Present Reserves by Jorc standard are now valued at $A123 per oz!!!!!

And that in a time when the same ounch above the ground gives us A$1500 in return !!!!!

They have their own plant which is in an excellent condition and have also exploration for tin and copper with some very good drilling results under their belt.

I think that this company is going to double in price very fast with the current high gold price and the steady ramp up to production of 80.000 oz per annum.

Not easy to see companies like Lihir or Newcrest to double in size but this little gold mine will do it with ease imho.

Please do your own research but the writing is for this one clearly written on the wall imho.

good luck

jojo