revised northgate valuation:
a few weeks ago, i posted a back-of-the-envelope comparison of WRM and NGX to 'the other thread', prompted by listening the to the WRM CC.
Message 17417092
in it i concluded that NGX's gold in the ground was being valued at $21 EV/oz, working on a 80% resource:reserve conversion ratio.
i added that my calculation might be have to be altered if i was wrong about the amount of LTdebt NGX was carrying.
i got some very useful feedback, but no one challenged the debt figures i had used.
now i finally got round to reading the NGX annual report for 2001, and comparing it to the latest NRs. and it is clear to me that i DID get those facts wrong.
NGX now has 130m O/S after the private placement.
that placement, however, was used to retire capital securities, not debt.
so there is still LT debt of 100m.
at a share price of approx USD 1.2, that means NGX has an enterprise value of USD 256m.
if you use that price to just AU reserves, then you are paying about $85 an oz. if you use my R+R figures, you get $34 per oz. and if you use elizabeth's Au equivalent all-in figure, you get $17 per oz.
the point being, i guess, that one should fix on one ratio as the basis for comparison, and apply it to all the companies under consideration.
elizabeth then wrote to say (amongst other things) that NGX has also bought 300k ox of calls, to give them leverage to a rising POG; but my reading of that note is that NGX has been SELLING calls at $295. can someone adjudicate between those two interpetations, before i go and call the company?
any more comments on these updated figures welcome:
peter |
