Price Guestimate
First, it is not gold which will move the price of the stock. Once earnings start to come out from the Monywa mine in Burma (remember, they have 8 BILLION pounds of copper which is now being economically mined at a TOTAL cost (labor + materials + overhead + amortized capital) of US$0.40 per pound. They have a royalty scale with Mining Enterprise #1 (the Myanmar government enterprise) which goes up to 50% of profits, depending upon the price of copper.
The bottom line is that even with a copper price of US$0.60 per pound, they are still profitable! If copper recovers even to US$0.80 per pound, the stock will move to at least to $3.00 and maybe higher.
The Backrychik gold mine in Kazachstan (sp ?) doesn't hold any good prospects right now. Yes, the mine does have 11 million ounces of proven reserves, but the Russians let the mine deteriorate so badly, and the ore is difficult to process. The current break-even point is $320 an ounce, so realized revenue from this mine is still far off.
I will call Marco Romero next week to see how the analyst trip went. If the Sekatak discovery in Kalimantan is as big as they think it is, it could give a real boost to the price.
In any case, the PR aspect of the company could definitely stand improvement. They have a mammoth copper mine in Monywa with extremely low production costs, good properties in Indonesia and Thailand, US$55 million in cash and cash equivalents, and 71.7 million shares outstanding. Obviously, with the current share price at US$0.67, there is a disconnect. (Please, don't blame it on Friedland. That is an old and tired issue. I think that the depressed copper and gold prices, the still lingering Bre-X psychology, and the internet mania have caused investors to have little interest.)
The moonshot for the stock price is still at least a year or two away. This period should be considered as a definite accumulation period.
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