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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (173250)	6/16/2021 11:59:24 PM
From: sense	Read Replies (1) \| Respond to of 217867

I've done my homework on New Found Gold... It's not that hard... just takes a little bit of effort. They've recently published a good number of drill core results, so you can make your own guesstimate of how much gold they've got in the portions they've tested. And, start by ignoring that they've got something like 150 Km of structure, along which they have identified more than a few areas of particular interest. The news, recently, has all been about one such spot, which they call Keats. And, at Keats, they're not done looking yet... while what they're finding is continuous, and open along strike, in both directions, and at depth... So, that means it is likely there is "more"... and you can guess as others can about how much more... as you decide what NFG / NFGFF is worth... to you. At Keats, they've recently reported results for 34 drill holes covering an area of roughly 400 to maybe 600 meters in length, depending on how the holes prove to align with variations in structure. The deepest intersection with the structure, thus far, is at 450 meters... and the results found there are consistent with those from other holes, and with what's been found between there and the surface. The average width of the structure they're testing and finding the gold in... is about 11 meters. The average grade they're reporting is about 1.3 ounces per ton. When I do a bit of simple math based on the obvious in geometry... while erring on the conservative side in a couple of instances... and including no value at all for what "might" be found in future holes... at Keats, or in the rest of the company's holdings... it looks to me that Keats likely contains something between 6 and 10 million ounces of gold... all in structures already tested, within limits from surface to 450 meters. What matters most... is that it is both large volume and high grade... and low cost mining... given it is near surface, and near to all the necessary supporting infrastructure required to enable making a mine. In valuing gold miners... what matters most is 1. how much gold there is, 2. how much per ounce it will cost to mine it, and 3. what the total cost of building a mine will be... as capital required becomes a much larger number for most mines as the scale grows larger. But, Keats is not the sort of project that requires digging holes you can easily see from space... it is that unicorn... of very high grade, at and near surface, in a great place to make a mine... There are lots of rules of thumb you can use, from there, to value a mining stock. The simplest will ignore the variables above... and compare one stock with another based on simple numbers like "how much gold is there for each share" or "when you buy shares, what is the price of each ounce of gold you're buying" ? Its reasonable to use those simple comparisons here... because the comparisons in other factors will only expand the relative advantage of a high grade near surface deposit in a great jurisdiction near civilization. The last comparison is easy... take the enterprise value and divide by the number of ounces... At NFGFF... Yahoo says... 151 million shares outstanding... enterprise value of $1.52 billion... which would be about right at $10 per share... but. at $8.50 right now... the market cap is only $1.28 billion. That $1.28 billion divided by 6 million ounces... means an ounce at Keats costs $214... today... if 6 is right. If there are 7 million ounces... the cost is $183 per ounce... taking just over 21 shares to own one ounce. If there are 10 million ounces... the cost is only $128 per ounce... So, that simplistic point of comparison is still a wide open variable depending on what they do prove up... as they continue drilling holes that expand the resource...but, in making comparisons, variation and changes in costs of mining, or financing, and in the price of gold will all matter too in a more sophisticated analysis. But, the point... is in how that number compares to other miners ? Is $214 per ounce "cheap" for a gold miner ? There are other things to compare, too, of course, but the more widely divergent the cost per ounce of one versus another... the more obvious the variation in relative value should be ? And, the more completely proven the numbers are... the more they can be relied upon ? So, should you wait for someone else to do the work and tell you what the number is... or do the math yourself to figure it out... within a range of reasonableness... useful in making rough comparisons ?