Anybody else have an opinion on Patricia Mining? PAT on the Venture Exchange will be Canada's next gold producer with the mine on track to be in production by July '06.
Fully diluted, there are only 32 million shares outstanding. At $1.00/sh, the markets valuation of Patricia Mining is $32M CAN.
Their Island Gold mine in Wawa, Ontario is expected to produce minimum 60,000 ounces per year when production begins in July of this year. Patricia Mining (45%) and Richmont Mining (55%) are partners in this venture.
At today's price of gold, that's $33,360,000 U.S. of total revenue per year.
The last figure they came up with for costs, is that it will cost $250/oz to produce the gold. A more accurate estimate is expected with Richmonts mining plan to be released in early February. Let's say $300/oz, just to be safe.
So, gross profit from the sale of gold would be total of $15,360,000 U.S.
At the start, Patricia gets 30% of that. Richmont is funding the mine development so when Richmont's capital costs are recouped, Patricia then gets 45% of the gross.
So, as soon as production starts, Patricia will have income of at least $384k U.S. per month. Minimum. That's $4.7M U.S. per year in profit. That's .15 EPS. After Richmont recoups their expenses, that figure rises to $6.9M per year, or .22 EPS.
They came out with great drill results last Thursday and an upgraded resource estimate will be out in early February. Considering the numbers, this seems like a very cheap current valuation?
Opinions please...?
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