>>>Posters should promote the stocks that they are long or short that they belive in. But they are then open to the fair scrutiny of the rest of us
Is this going to provide the best Leverage to the price of gold?
Kinross produces about 1,000,000 oz of gold per year. I think it has ~ 350,000,000 shares fully diluted. C$1,000 invested at the current price of $1.65 gives you 1.75 ounces of production,... pretty good leverage !
Northgate (NGX.t) says they will produce 295,000 ounces this year. After the ongoing recapitalisation is complete, I think there will be ~129,000,000 shares outstanding fully diluted. $1,000 invested at C$1.30 , should give you the same 1.75 ounces of production ... so the same leverage to gold prices as Kinross (but at a lower cost per ounce).
But wait ! The new NGX capitalisation will include the issue of long term warrants. These four-year warrants will provide leverage to the price of the common shares, and thus even higher leverage to the gold price. It seems to me an arbitrage situation relative to the rights issue has driven down the price of the common. Tell me if you want more detail. |
