Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: jackjc who wrote (4723)	1/14/2006 9:30:03 AM
From: loantech	Read Replies (1) \| Respond to of 78426

JackI remember your posting abut QEE. AGT and QEE and WGDF had been on my radar for a long time but your posting that you bought QEE kicked me into action. Of the 3 AGT has surprised the most. Question for you. Each mine has different resources, amounts produced and profit margins so this "formula" may not be applicable but am curious as to yours or others opinion. Some mines share prices such as GGC sell at a high multiple of cash flow. GGC is at 1.90 and they made .04 cents per share last quarter I believe. So that is 47.5 times cash flow. They mill 140 t/d now and may ramp up to 340 by year end 2006.Assuming costs remain stagnant would the tonnage increase add to their income per share by an amount = to increased tonnage minus a % for increased costs. 340 is 2.4 times the tonnage so say a potential increase in cash by 2 times so 8 cents per share? They realized sales at <<During the nine month period ended September 30, 2004, La Guitarra milled 30,683 tonnes of ore with an average head grade of 382 silver equivalent g/tonne and produced 376,524 silver equivalent ounces. Average realized prices for the period ended September 30, 2004 were US $6.46 per ounce of silver and US $400.84 per ounce of gold.>>> The additional income from higher silver and gold prices and higher head grade <<Overall Performance During the nine month period ended September 30, 2005, La Guitarra milled 33,537 tonnes of ore with an average head grade of 682 silver equivalent g/tonne>> may add substantially to the bottom line. Let's say 50% for the purposes of discussion. So increased tonnage "MAY" get income per share to 8 cents and increased profitability "MAY" add another 4 cents to the bottom line so 12 cents per share? Using the formula of 47.5 times cash flow that is current we could project a stock price of 47.5 times 12 cents or $5.70 per share? Is this logical or does the idea get BUSTED? Curious if this works for a stock like QEE. If they can show a profit of let's say 3 cents a share times the 47.5, well that would be a nice increase, but not sure future projections work this easily. All input welcome. Tom