GREY:GBRIF - Post by User
Post by
Giftedoneon Mar 07, 2011 11:29am
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Post# 18244294
new to the board
new to the board
Im new to the board .. and new to this stock.
I see there are some negative nellies out there ... probably bought in at 75 cents.
This should be a time for learning .. almost every company prior to getting going into production has a pop and the a significant pullback.
Bottom line with this company is that they now are producing and this production will increase. It may not be in a month or two .. (there are always hiccups) .. but sooner or later.
I dont care if currently it is costing 1200/oz to make an ounce of Gold. At a price of 1400/oz that is still 200/oz profit which is enough to get production up to speed.
More to the point .. What will it take to justify a 120 million dollar market cap ? Using a P/E of 12 which is more than reasonable given a producing mine in a mining friendly jurisdiction. They need to earn 12 million a year or 1 million a month.
At a cash cost of 600/oz = $800/oz profit @ 1400 gold .. they need to produce 1500 oz/month.
As they ramp up to 700 tonnes/day @ 5g/tonne = 3500 oz/month .. this does not seem like a stretch over the next 6 months.
Within 6 months this stock take out the old high of 75 cents and that kind of return works for me.
On the downside .. there is much support at 40 cents .. and the long term (210 day) moving average is currently at 40 cents. The risks hiccups that could slow the production ramping up and that Gold drops to 1000/oz.