Zeev; I don't know what a stock will be in relation to what the mine can NET in profits down the road, but I do know that Bre-X is not yet mining and their stock is $225.00. This IPM play, for now is a speculative play. Who will still have their stock down the road when the smoke clears is hard to say, but I'll bet not 10% of us will.
In my view, the NET income will decide what the stock will be worth down the road. As in any investment, real estate, bonds, etc, a rational investor will pay 10x for a return of 10%. So if IPMC can pay out a dividend of $10.00 per year per share, someone out there will pay $100.00 for the stock, assuming it has long term potential.
So, what I'm saying is that, on speculation, this stock could easily go to $500.00. If IPM can, down the road, pay out a good dividend when in production, then the stock should be worth 10x dividends.
Working things backward for the stock to be $500.00.
It needs to pay out $50.00/share/year in dividends = $900,000,000.00 dollars/year in dividends for 18M shares. At a net profit of lets say $30.00 per oz of gold they need to produce 30,000,000/oz/year or 82,000 oz per day. At .25oz/ton thats 328,000 tons per day of dirt. But if this dirt has equal amounts of Platinum, and assuming they net $30.00 per oz of Platinum,(which is probably very low as the gold would probably absorb most of the production costs) then they only need to mine 150,000 ton per day. Is this unrealistic? Or is marketing 30,000,000 oz of gold per year unrealistic? - Denis |
