I mentioned late summer, around 7 months from now (Sep 1), which is tight. Gold/Silver ore, 4g/ton gold equivalent. 2.4 million oz resource, expected to expand. Cash production of $127.61 per oz. GAM 40% of cashflow est. to be C.42/share at $300/oz gold rising to C.58 after 3 years. 139%IRR, payback 1.6 years, it's a good project.
biz.yahoo.com
Development requires no $ from GAM. For it's earn in, Bolnisi pays GAM C$30,000 per month until September 2003 when it increases to C$100,000 per month (until production begins). Production must be in full production by Feb 2004 or reverts back to GAM. Bolnisi is definitely motivated to get it done.
biz.yahoo.com
NPV of GAM share of this project is about U$170 million (this # needs double checking, because if it's the total NPV, and GAM is only 40%, it's obviously much less) at $300 gold, or U$4.25+/shr.
Stock price currently U$1.70/shr.
They have about $6 mil cash on hand.
GAM also has additional property that 100% owned that contains significant resource (could be 3 million gold + 100 million silver or more) but needs to be validated with additional drilling. Drilling plans for this summer are extensive. They have the $ and will have the cashflow to fasttrack property development. Kind of reminds me of NRI.TO - cashflow gives you lots of options.
So my question is, has anyone done the research to verify or repudiate the numbers above? If the numbers are correct, it seems like the stock represents good value.
Anybody's input is appreciated. |
