Hi charred,
Here's how I'd look at the SG acquisition:
The purchase actually cost $23 million: $16 m debt, $7 m cash, and $6 m came from the sale of unnecessary stuff.
I'll stick with your assumption of 420,000 oz.
If indeed the property were to be exhausted at the 420,000th oz, then assuming POG @ $300 /oz and cash production cost @ $200 /oz, one could use the last 160,000 oz of deposit to pay off the loan.
(I've left out the 3% p.a. interest expense. Also, I'm assuming you'd run the equipment into the ground at that point, so your total cost of production would equal the cash cost.)
What did they pay for the remaining gold?
$7,000,000 / 260,000 oz = $27 /oz.
What's the deposit worth to KRY @ POG $300?
$100 CF/oz * 260,000 oz = $26,000,000.
Interesting . . . that's KRY's market cap!
Question: Does anyone think that PDG might buy KRY to settle the controversy?
Best regards, John. |
