RE:RE:Ana Paula is insanely undervalued. Alio is now deep value.Yes, they will not develop AP for awhile. Once mgnt is confident on cash flow from Florida Canyon they can start thinking of debt to develop AP. There is no debt on balance sheet now. Waiting on cash flow to pick up to the point of financing AP development is probably not realistic. I hope they don't stream or partner. Partners tend to get the better end of the deal, money up front and 40-50% of net gold forever...
AP is basically being put on care and maintenance. Capex should be minimal, total expense less than $200,000 annually. San Francisco will not be processing any ore, only operating heap leach, capex $200,000 annually. Minimal salaries.
So Florida Canyon will have 2 heap leach stacks.
2019 Q1, the last normal quarter: Single stack produces 12,000 oz gold and 8,600 oz silver with co-product AISC of $1220. Dual stacks fully operational Q2 2020 producing 24,000 oz gold and 16,000 oz with co-product AISC of $1100.
With 1.5mil admin cost, only $400,000 capex for San Fran and Ana Paula, $500,000 equipment loan and interest, 0 for exploration...total overhead is 2.4mil per quarter.
24,000 oz * 1400 = 33.6mil revenue
24,000 oz * 1100 = 26.7mil AISC
6.9mil operational cash flow
minus 2.4mil overhead
free cash flow 4.5mil per qtr
Ignores non-cash (depreciation, currency adjust, derivatives, deferred taxes).
Does not include additions to revenue from heap leach at San Fran, but this will die out in 2020.
4.5mil per qtr is not enough to finance development of Ana Paula. Once you make a development decision it is not wise to take the slow approach. Costs have a habit of running away the longer that the build out takes.
However, showing steady free cash flow will allow financing at much lower rates than this company can get today.
Anyway, this is a napkin estimate and I welcome comment.