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Gold/Mining/Energy : Crystallex (KRY)
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To: flightlessbird who wrote (5760)2/26/1998 12:15:00 AM
From: woody  Read Replies (2) of 10836
 
U$25 PRICE IS NOT SPECULATION BUT DREAMLAND...WAKE UP. AT U$25 THERE IS A MARKET CAP OF 850 MILLION U$ FOR THIS STOCK. THATS $1.2 BILLION CANADIAN DOLLARS. OK LETS DREAM! AT 10 TIMES CASH FLOW THIS $25 STOCK WOULD BE VALUED AT 10 TIMES TRAILING CASH FLOW OR CASH FLOW OF $2.50. A CONSERVATIVE VALUATION APPROACH. THIS WOULD BE $85 MILLION IN CASH FLOW. THIS WOULD BE MEANING THAT KRY WOULD HAVE A PRODUCTION RATE OF 566,667 OZ OF U$300 GOLD WITH CASH COST OF $150 (REMEMBER WE ARE DREAMING)OZ. WE WOULD BE PROPERLY VALUED U$ 25. OK, OUT OF DREAMLAND!. WE ARE AT LEAST 2 - 3 YEARS - LEGAL, CONSTRUCTION, DRILLING, WHATEVER - AWAY FROM PRODUCTION SO THERES A DISCOUNT TO THE VALUATION. THE CURRENT DATA IS AT 450,000 OZ PRODUCTION WITH HIGHER THAN $150 COST IF I RECALL ITS AROUND $215 BUT LET'S USE $195 AT THAT PRODUCTION WE HAVE A CASH FLOW OF U$1.38 ( $105 * 450,000 OZ / 34 MILLION SHARES OUT ) AND AT 10 TIMES CASH FLOW WITHOUT A DISCOUNT THE STOCK IS VALUED AT U$13.80 OR $20 CDN. IF WE EVEN BRING A JOINT VENTURE, A FURTHER LEGAL DISPUTE, ENVIRONMENTAL CONCERNS OR PROJECT RELATED DEBT FINANCING INTO THE DEAL WE MUST ADD FURTHER DISCOUNTS. THE GOVERNMENT OF COURSE WILL HAVE A PART. THE STOCK WOULD PEAK AT U$10.00 OR A MARKET CAP OF $500 MILLION CDN$. HEY LETS THINK ABOUT IT. AT THE PEAK OF THE GOLD MARKET AREQUIPA WAS TAKEN OUT FOR $1 BILLION DOLLARS WITH WHAT WAS SUPPOSED TO BE A 9.2 MILLION OZ DEPOSIT OF ECONOMICALLY MINEABLE GOLD. THE PRECIOUS METALS INDEX HAS FALLEN 50% SINCE THEN SO A FAIR VALUE WOULD BE $500 MILLION OR $15 CDN. THAT'S THE TOP REASONABLE VALUATION. THE NEXT QUESTION IS WHAT IS KRY WORTH UNDER ANY OTHER CIRCUMSTANCE BUT NIRVANA. WHAT IF THEY LOSE THIS COURT DECISION ? WHAT WILL THIS STOCK BE WORTH ? CERTAINLY LESS THAN CURRENT MARKET OF U$7.25
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