American Bonanza Gold Corp ABGFF

RE: RE: RE: Valuation

[dr_airtime]

As I said in my Claude resources comparison - there are no direct comparables to BZA out there. Claude only comes close if you strip out their advanced exploration deposits @ $100 per M&I ounce, as they are farly high grade underground mine ~6-7 g/t with similar level of P&P reserves as BZA. Based on this Claude was trading at 3.2X back-of-the-envelope cash flow using spot gold.

This is why I was arguing for a 3X back-of-the-envelope cash flow valuation as a minimum for BZA. I think we will go higher than this if we can keep our costs very low as we'll get a premium and could hit around the 5X range - especially if we can show that we extend mine life through drilling. This is one year out. Above this, NAV is the only metric that counts. Something to think about is that if we end up being a low-cost producer in sub 500 range - think about the leverage to the Au price we will have.  

materialsgirl has mentioned that costs are won't come in at low 400's per feasibility study due to higher royalties with Au price increase.

We still have upside from here altough we have moved fast. I would expect some analyst coverage to finally start popping up over next couple months.