ross1000The only reasonable way to evaluate a mining company is to look at the net present value of the potential future cash flow, right? You have to take into account not just the cash flow that the mine is generating, but also sustaining capital costs (including future exploration and development costs) associated with keeping the mine in production. Assuming you can derive a suitable cash flow model for the mine, you can then calculate the net present value of future cash flow by using an appropriate discount rate to represent the geological, political, social and financial risks. If you sum all the net present values together, add any other assets on the balance sheet and subtract any debt, you will arrive at the net asset value per share. In this case AUQ is debt free (with Nevada properties) and saying $177.00 bucks/expense's. And lets say the 1,000,000 is there with there cut of 600,000 ozs. Lets say they do 30,000 ozs a year with 60% as there cut, which is 18,000 ozs with a 100% recovery rate and the price of gold is $750.00 which would yeild $573.00 pre-tax gross profit 63,500,000 float equaling an EPS of .164 per year less nothing else, no drilling Nevada; nothing. And on top of it I'll give you this, mining stocks do offer leverage to the commodity gold prices, a premium over rational asset value, thus so many times earnings; 10 times manybe. And in this instance I'm adding leverage from the current gold price, thus the $750.00 quote as stated by many gurus to be the price this year. Where does the $3.00 dollars/share come from on a stand alone mine as AUQ's. 30,000 ozs/year isn't that much! And don't give me the NWO routine of $1650.00 dollars, yes, I agree it will probably get there, but don't tell me you also have a crystal ball also! They say that the market knows everything about a stock, all there is to know is reflected in there shareprice, but granted, the market is falible, so why is there stocks with nothing trading higher than we are? Is that not part of the "Dow Theory." Million oz mines don't come along everyday, do they? Oh ya, the OSC will want to know if this is a million oz mine too! I think I call bull$hit! If you believe .36 is not true value and the market is falible and wrong, then it's being manipulated. But it's still not worth 3 bucks! Maybe a dollar by christmas!
Wes