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Gold/Mining/Energy : Gold & Gold Stock Analysis -- Ignore unavailable to you. Want to Upgrade?

To: A Horse With No Name who wrote (9731)	11/10/2007 11:02:16 AM
From: loantech	Respond to of 29622

Thank you. I hope it works for both of us. IN theory it sounds good but there are 155 million shares FD, it is in California, and there is a 35-40% hedge, and it is of marginal grade. If it surpasses all hurdles it may do well. I have ran some back of the envelope calculations on production numbers and cannot seem to get much above a 7-10 dollar share price. They have an excellent format on their website presentation for help. 165000 X 801 (hedge price and close to market price) less $416 all in costs =$63,525,000 divided by 155,000,000 = .41 X 17.3 = 7.09 They show 42 cents cash flow per share and up to 17.3 times p/cf Price / Cash Flow Ratio (2008E)–Western Goldfields: P/CF = 12.1–Peer group average: P/CF = 17.3 Using .42 X 17.3 = 7.26 Using PE ratio they get .33 X 27.1 = 8.94. Price / Earnings Ratio (2008E)–Western Goldfields: P/E = 15.1–Peer group average: P/E = 27.1 westerngoldfields.com Now if they can just get production up to let's say 175,000 ounces and get costs down just a tad to 390 let's say(sales of aggregate to LA county helps on this) and gold stays at 835 then they receive an average price of 823 with costs of 390 and a bit higher sales numbers could look like this: 175,000 X 823 - 175000 X 390 = 75,775,000 X their example of PE to CF per share .33 divided by .42 =.785 X 75,775000 = 59,483375 in earnings per share divided by 155,000,000 FD =.383 X 27.1= 10.30 per share. So there is some blue sky in Western IMO. Rough numbers but their presentation provides a reliable format to work from. Should I hold Western to 7 bucks 8 bucks or 10 bucks? If they make an accretive acquisition these numbers could improve.