production05 - stockhouse
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Hey Blaze88,
Below you will find the share price analysis I had originally published a couple of weeks ago. I probably wouldn't provide a new update again until the dust settles and more details become available. However, I wouldn't bet against the $8.91 per FD share scenario I had originally identified. Also, keep in mind that the 200K production scenario did not include production from this new Peru acquisition, neither did it include any production from Carolin. It wouldn't be a dream to think that we have a realistic shot at existing 2007 with a 300K annual production run rate.
Production05
2007 View - UPDATED on March 21st
Thought I would update our 2007 view now that we have officially commenced work at Lamaque.
Once again, for the purpose of this analysis, let's be conservative and assume that nothing else happens for the balance of 2006.
Our numbers can be even firmer now, as the plan is to fund the Lamaque expansion through cash flows from Sigma, as well as from previously issued warrants (still to be exercised). As a result, the 106.7M FD share count (that we have been using all along) is still the number.
Also, debt does not factor into the equation as we will be debt free. As such, I guess the scenarios are pretty clean. It is now really just a matter of execution, and a reasonable gold price ($550 US) of course.
As usual, you can select the production level and PE ratio that you are most comfortable with.
Scenario 1 – 200,000 ounces of production:
* $47.5M in profits (net)
* $.446 earnings per FD share
* $8.91 share price (PE of 20)
* $6.69 share price (PE of 15)
* $4.46 share price (PE of 10)
Scenario 2 – 175,000 ounces of production:
* $40.6M in profits (net)
* $.381 earnings per FD share
* $7.61 share price (PE of 20)
* $5.71 share price (PE of 15)
* $3.81 share price (PE of 10)
Scenario 3 – 150,000 ounces of production:
* $33.7M in profits (net)
* $.316 earnings per FD share
* $6.31 share price (PE of 20)
* $4.73 share price (PE of 15)
* $3.16 share price (PE of 10)
Assumptions:
* 200,000 ounces (Scenario 1), 175,000 ounces (Scenario 2), 150,000 ounces (Scenario 3)
* $550 US gold price
* $300 US cash cost
* $8M Cdn in annualized G&A expenses
* 106.7M Fully Diluted shares
* .90 exchange rate
Good luck with your investments,
Production05
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