Hi. That is true that this stock appears terribly undervalued at first glance. However, the cost per ounce ($170) is related to the concentration. It takes into account the overall size of the deposit and its distribution. As I said before, I would rather have cost per cubic meter of material extracted and treated. If, let us say, the final estimate is around 60M ounces instead of 170M ounces, the cost per ounce would move to around $500 per ounce, which is unprofitable. Of course that is unrealistic, because we already know from the existing report that concentrations vary widely, so that some areas would remain exploitable. However, this could mean that the actual proven reserves (economically exploitable) would be much lower than the said 60M. There is a lot of uncertainty, hence the low price. When the next geological report comes out, it will be boom or bust for this stock, IMHO.
Michel |
