Hello Jadrew
Nor could I!
I certainly hope that you did not invest in SUF because a poster (I) felt it was a potential $500 stock. I hope and trust you did your own DD and arrived at your investment decision through your own research.
Regardless, posts have been overly depressing lately and of a shorter's perspective. Lets take a look at why most of us invested and have a little fun again speculating.
Round numbers of course.
According to the AR, Leopard fissure production, excluding all other sources of mill feed, will be approximately 2,400 tonnes per day or 716,000 tonnes per year and 480,000 carrats per year by 2001. That suggests a possible share value in 4 years of approximately $29 per share. So assuming that either through self financing (profits) or a line of credit, SUF increases Leopard fissure production to 10,000 tonnes per day within say the following 4 years. That's roughly 3,000,000 tonnes per year or 2,010,000 carrats per year by 2005 with a probable share value $120 per share, using a PE ratio of 20 (less than Barick even now).
For the sake of argument, lets say the Sugarbird fissure is also put into production around 2001 and by 2005 is producing 3,000 tonnes per day adding say, another $35 per share, again, just based on production.
SUF's share of Angolan alluvial and fluvial production by 2005? Say hypothetically 1,000 carrats per day @ $350 per carrat, that's approximately another $66 per share. After all, they just got going, and averaged roughly 70 carrats per day with average peak days over 170 carrats.
Now lets say that SUF has Camafuca in modest open pit production of 5,000 tonnes per day by 2005. That's approximately 1,300,000 carrats per year @ $150 per carrat or another $125 per share.
So that's $120 + $35 + $66 + $125 = $346 per share based on reasonable production achievement by 2005.
Not considered:
1. Allowance for minimum 30% to 40% increase in diamond prices over the next seven years.
2. Allowance for production from glory holes such as the M-1 or other possible open pit sources at Klipspringer.
3. Value for the obvious future production potential of Camafuca to say 10,000,000 or 15,000,000 tonnes per day, relatively easily achievable in an open pit mine with only modest increase in capital expenditure.
4. Value for exploration success, especially in Canada (NWT), where the market will assign a premium due to political stability and high value pipes found to date.
5. Finally, I have treated these calculations as if dollars earned (US) were share value dollars (Canadian). So in 1998, apply a factor of 1.47 to share values. For example, the $346 should be $509 per share Canadian at today's conversion rate without values assigned from items 1 to 4 above.
Obviously this is an overly simplistic analysis and circumstances and events could and will provide any number of reasons why these numbers will not be achieved (or exceeded).
But my hypothesis of more than a year ago, I believe, is more probable today than it was then. Prices realized for production and glory holes were unknown at that time.
Regards
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