"Back of the envelope calculations suggest either of the above scenarios could result in very substantial cashflow for HAV in the near-term.
A $3 share price implies a market cap of approx. $630 m fully diluted.
Doesn't seem particular unreasonable should it play out this way.
Is that the way you're thinking Clark888?"
A $3 calculation can easily be built from my original Portia bedrock gold ore post during May 2015:
http://hotcopper.com.au/threads/pet...ple.2752553/page-5?get_post=true#.V7wDg1efegR
Mr Market is currently assuming
more than my original $100 million (from May 2015) from the Portia 'weathered' bedrock gold ore:
BOT net gold sales revenue $40 million (sheltered by existing income tax losses)
Bedrock net gold sales revenue $85 million (~$121 m before income tax but after processing costs)
HAV market capitalisation 23/8/16 $125 million
It should also be noted that Mr Market is not attributing any value to Kalkaroo, Mutooroo, North Portia, Prospect Hill exploration upside etc etc based on the share price jumped from 42 cents to 74 cents based only on the ASX release dated 2 August 2016 'Longer Term Potential Indicated for Portia Gold Mine'.
The bottom of the open pit at the Portia Gold Mine was originally planned to be: 400 metres by 120 metres.
IMLTHO, potential gold in the 'weathered' bedrock and bedrock ore of the existing Portia Gold Mine open pit shell could be:
400m * 120m * 50m * 2.4SG * 6.7g/t * A$1,750/oz OR it could be deeper, in which case
300m * 93m * 70m * 2.4SG * 6.7g/t * A$1,750/oz
Then divide by 31.1034768.
HAV's share would be 50% of the above or approximately
500,000 ounces of gold (I assume it is all gravity recoverable).
This calculates to HAV's share of approximately
$880 million of potential
gold sales revenue from the 'weathered' bedrock and bedrock ore, on the basis that at least
90% # of the above is recoverable, before processing costs to be incurred by HAV.
Assuming an Australian income tax rate of 30%, the above $880 million becomes $616 million after tax.
I have a feeling that the gold ore will go deeper than 70 metres. It is just a question of what depth it becomes uneconomic for CMC to extract the gold ore to be placed on the ROM pad on the surface.
Remember, HAV is only responsible for paying the processing cost (which I have previously estimated to be less than $300 per ounce).
#
These are my estimates or IMLTHO. If you don't like my 90% recovery, you could use a longer length as the bedrock gold is likely to be a lot longer than the existing Portia pit dimensions and it is probable that the Portia pit will be expanded both south and north based on HAV Management's upcoming drilling program. Plus you can always reduce my recovery factor and go deeper for your own calculations.
Cheers
These are only my random thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional expert
(20min delay)