Hamster rant,...and some updated calculations :-))))
Anyone with two brain cells and a calculator could look at the map of Snap Lake that Winspear has provided on their website for over a year, and multiply the area of the indicated and inferred resource of about 12 million tonnes (22 million carats) by 3 or even 4 which represents the area of dyke extension proved by stepout drilling. This is not rocket science and most of us that believe in this story did this at least a year ago. It isn't too difficult to multiply a few numbers.
The problem with most of the market, is they prefer to chase the internet tech stuff, the stock du annee for the last few years because the anal-ysts and brokers tell them to. The resource stocks (like Winspear) have been pummelled down to multi-year lows, so no brokers or anal-ysts pay much attention to them.
The main key to the share price puzzle is of course the tonnes per day figure, which when set determines overall profitability. Even a stupid squished hamster can calculate a rough number for earnings per share.
Without De Beers crooks, WSP goes it alone
Old Hamster calculations, $Cdn 95/tonne processing costs, and 3000 tpd:
3000tpd x ($300 cdn$/tonne revenue-95cdn$/tonne costs-$30 cdn$/tonne marketing costs) x 350 days x 68% - $20,000,000/year (principle payment&interest, misc business costs)= $104,950,000 per year before tax.
Divide by 120 million shares,.....CDN$0.87 earnings per share. Now for a multiple, well Diamet's multiple is around 10, so let's use it.
10* $.87 is $8.70 for a fully functioning diamond mine.
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New Hamster calculations, $Cdn 95/tonne processing costs, and 6000 tpd:
6000tpd x ($300 cdn$/tonne revenue-95cdn$/tonne costs-$30 cdn$/tonne marketing costs) x 350 days x 68% - $20,000,000/year (principle payment&interest, misc business costs)= $229,900,000 per year before tax.
Divide by 120 million shares gives CDN$1.90 earnings per share. Now for a multiple, well Diamet's multiple is around 9 now, so let's use it.
9* $1.90 is $17.10 for a fully functioning diamond mine.
Now if De Beers or BHP buy, they can fund the mine through loans and profits, so the question becomes, how much would one of these folks pay for $229 million per year in earnings before tax. The key is growth. If the resource can be accessed using several adits, and you can increase the 6000 tonnes per day to an even higher number, what multiple of the earnings would you apply. A non-growth business would be 1 or 2 times annual earnings, but a growth business,.....
well my guess is 5 times (5 x $229 million = $1,145 million), so $1145 million divide by the number of outstanding WSP shares which I think is about 61 million gives,...............$18.75 per share.
A second way to come at it, is to look at Dia Met's earnings generated at another great Canadian diamond mine, Ekati. Dia Met made about $75 million before taxes in their past year of production. That's about one third of the projected Winspear earnings by the hamster. So let's look at Dia Met's market cap. 33 million shares out times $17.50 today = $578 million divide by WSP 61 million shares gives $9.46 per share multiply by 3 because WSP will make 3 times their puny earnings = $28.00 or so. One would think a fair offer would be over $10.00,...of course who says life is fair.
I bet few of the people bitching about Turner and the share price have even bothered to calculate or look up anything. They just sit back and bitch at Turner because the stock ain't performing. At least I got off my arse and talked to Turner, and a lot of the people working at Winspear over the last few years. They are just as pissed at the market as the rest of us. They would love the SOB stock to properly reflect what they have found, but how do you get all the market fools and turkeys looking at the dot com chit that runs off IPO money and makes million dollar losses, but beats anal-ysts expectations so trades at multi-billion dollar market caps (LOL), to look down at a poor little resource stock that has a multi billion dollar resource and can make over $100 million dollars per year before tax?????
Of course most anal-ysts and brokers (they are called that because they make their clients broke!!!) don't even bother to crunch the relevant numbers as they prefer to let someone else do the work they should do like so many other complainers, so they accept what De Beers says, after all they are the big diamond guys right,....they haven't screwed anyone, or killed anyone, or have African blood diamonds on their hands,....oh, they would never tell a lie or screw anyone, right...????
Speaking of brokers, they don't make any money if you don't buy and sell all the time. If you hold a value play like WSP, they go broke. The dot com market was created by them, and is constantly fed by their B.S. and the average Joe Sixpack is making them very rich while the banks are collecting record profits because Joe Sixpack is up to his/her ears in debt trying to make money chasing dot-commie and techie stuff.
Hamster rant end. |
