Latest from Speculativestocks.com
"While it took a little longer than expected, we have at last seen our last years
story, wayside-gold.com come to life in a solid fashion.
The stock is now trading at $0.40CDN for a gain of over 100% from our profile
of $0.18CDN and we expect it to go higher. As with all speculative type stocks
this 'higher' may well involve some 'lowers' as well but the overall trend
should
be up.
The company is moving very rapidly on the road to opening their mine and with
the announcement last month that they were planning on producing over 100,000
ounces/gold per year from this mine, allows some reasonable extrapolations to
the upside ( production ) price.
we have calculated that at a gold price of US$300 and total production and
operating
costs of US$250 ( $180oz for production and $70oz for other costs ) the US$50/oz
profit can be calculated as follows.
Taking 50 million shares outstanding at the time of production and 100,000oz/yr
at $50 profit/oz gives $5 million. This divided by the outstanding shares gives
$0.10/shr profit that should equate to, using the standard industry multiplier
figure of 30 to 50 times earnings for a pure gold mine, of $3.00 to $5.00 a
share.
Now to be reasonable this will not occur until the mine is in full production
and this may be a year down the road, however during this next year we
anticipate
there will be a speculative premium placed upon the shares and this is more
difficult
to ascertain.The stock will also be volatile during this period and may in fact
have swings of 20% to 30%.
the other factor is the price of gold. this is also an unknown, however all
indications
point to this price being in excess of $300/oz and more than likely $350/oz.
This is also not an easy calculation to make as there are many confilcting
pressures
being brough to bear on this market. As it is money in the trueist sense of the
word, none of the powers that be want it to rise against the US$. After all this
is an election year and the powers that be have it in their power to play games
the likes of which most investors would be jailed for if they tried it.
That is the benefit of being a government, you get to play around with the 'big
picture' no matter who gets hurt.
However using just the swing rule, two years ago we determined the lower price
of gold would be $260 and we were off by only $8.00. Using the same technique
we can see an upside price to gold of $588. This is calculated using the
formula.
Last high price of gold $420 - last low price of gold $252.= $168. Take the
difference
( $168 ) and double it ( $336 ) and add the last low price ($252) to get $588.
Now this is a rough and ready calculation and will not take into account the
normal speculative overruns that may occur from either fear or greed, as we have
seen with the Palladium market, but it gives a target that can be relied upon,
sans too much manipulation."
Any Comments
Joe |
