Zeev:
With reference to your post #2390, I think you should start taking some of your own advice....
<<I would refrain from that and just say that you cannot use a calculator properly.>>
There are a number of major errors in your calculations.
<<take their best number of 2500 oz/day (10,000 ton/days), take just $75/ton cost of production.....and you get at $330/oz gold....yearly gross profits of $22.5 MM>>
Not so....2,500 oz x ($330 - $75) = $637,500 gross profit per day. Multiply this by 350 days per year and you get $223 millions yearly. Looks like you missed a factor of 10 here.
<<of which IPMCF owns only 70%>>
IPMCF has the right to 90% eventually. Check it out on their Website. So, $223 MM x 0.9 = $201 MM.
<<of which they get to keep after taxes, lets be generous, 60%>>
Assuming that your 60% figure is correct (and I have no idea about that -- but I would be surprised if many corporations are paying 40% of their gross profits in tax), then after tax annual profit would be $201MM x 0.6 = $120 MM.
<<and lets be extremely generous and say they need not issue a single additional share>>
The current fully diluted figure is 20 million shares. i.e. After tax profit per share would be $120 MM / 20 MM = $6.00.
<<so the stock will be worth at 10 PE five years down the road>>
Show me a highly successful precious metals company with at least 12.5 million oz in reserves that trades at only 10 times PE and I'll buy it <g>. However, even accepting your figure, you get a price of 10 x $6 = $60 per share.
Please Zeev -- be more careful. To quote your own words: "You (people) are actually irresponsible. Some would say, criminally so, but I would refrain from that and just say that you cannot use a calculator properly." The figures above show that even using your own assumptions, the stock should move to $60 per share.
I would suggest that if you double the opt figure to allow for pge's as well as gold, and if you assume a _minimum_ PE ratio of 20 for a stock of this nature, then you have a more reasonable estimate of potential value -- i.e. 2 x 2 x $60 = $240 per share. And this is for a basic operation of 10,000 tons per day.
If you adopt a more normal valuation approach for a pure exploration company, based on value of in-ground reserves, you would get a figure close to this for the presumed Au and PGE's on the first sq. km. alone (to 300 feet depth). It is not difficult, nor irresponsible, to show that the value of this stock could go to more than $500 per share, provided that:
- you clearly state the assumptions involved
- you also state that this is a highly speculative stock and that people should be prepared to lose their entire investment in return for the potentially enormous profits
- you can use a calculator properly!
I would be interested in your response, and especially whether the estimate of a minimum of $60 per share, which is based on _your_ assumptions, is acceptable to you <g>.
Regards,
Howy |
