Revenue info by Coolbreeze
1. All properties are 100% owned and operated by Indocan or its subsidiaries(Prodigy Resources). No debt to speak of except a small amount which was brought on(with Prodigy) through the recent purchase of Prodigy.
2. Starting off by getting the book value we'll just use the garnet and gold values. There is approx. $1,000,000,000 worth of Garnet and $150,000,000(500,000 ounces*$300.00 per ounce) worth of gold. This would give a book value of $24.47 (approx.) per share.
3. Lets assume that it would take approx. 20 years to fully extract all recoverable minerals/metals.
4. With the above things said, lets look at profit margins(EPS) per year. I've been told by Jeff that the Garnet sales will yield approx. 8-10% net profits and the gold approx. $200.00 per ounce. So, 500,000 ounces of gold at $200.00/ounce divided by 20 years gives us approx. $5,000,000 per year. As for the garnet (per the PR and Jeff), $418,000 ($418 per MT(metric ton)*1000 MT per month)*12 months at an 8% profit margin gives us $401,280 per year. Add both totals together and divide by the 47,000,000 shares outstanding and you come up with $0.115 EPS(approx.) with a PE of 8 gives you a $0.92 per share value.
5. Lets say the company was looking to sell the properties to someone else using a 50% sales price off the potential profits from the properties. There is approx. $1,000,000,000 worth of recoverable garnet at a 4% profit margin gives us $40,000,000. 500,000 known recoverable ounces of gold at approx. $300.00/ounce gives us $50,000,000 added to the above amount gives a total of $90,000,000 divided by the outstanding of 47,000,000 gives a total of approx. $1.91 per share price. Lets say you only use a 70% sales price off the potential profits and you will come up with approx. $1.15 per share price. So, as you could see based on the above the buyout price is somewhat undervalued at current conditions.
6. Now lets assume that the borings yield the supposed 6,000,000 ounces of recoverable gold that is being projected as a reasonable/probable estimate. Book value would be increased to approx. $60.00 per share. Profit margins based on 20 year recovery would be increased to $1.28 EPS with a PE of 8 gives us an approx. $10.28 per share price. Looking to sell property after findings would increase sales prices to approx. $13.61 per share at 50% profit discount and to approx. $8.17 per share at a 70% discounted sales price. So, based on the addition of 6,000,000 ounces of recoverable gold the current buyout price is extremely undervalued!!!!
7. Keep in mind that the above facts are based on the garnet and gold revenues alone. The properties also contain copper, nickel, cobalt, platinum and palladium. Also that the company is currently looking into possibly purchasing another property. All of this will do nothing but increase the bottom line value of the company.
8. Revenues should start coming in during the next 3 months and producing profits around Q1 of 1999.
Sorry for the delay but I am really busy as of late.
Hope this helps,
CB |
