RE: Good News!Looking at the potential here, fully diluted at this $2.25 price the market cap is about $1.7 billion.
They had $100 million in revenue and their expenses exceeded their revenues for a 2c/share loss.
Currently their revenues are under 6% of their fully diluted market cap and then they have to pay all expenses.
So, they get to full production 5-6 years down the road and they have $500-700 million in revenues. My feeling is that if platinum goes up to $2000 it will be because of currency declines, which will mean huge increases in costs. For example, 2-3 quarters ago Eastplats almost turned a profit, but currency changes ate a huge percentage of the revenue. The only way platinum makes $2000 is with currency devaluation, and that comes with much higher costs as costs are paid in a different currency.
I think the best case scenario is that after all costs, not just the production costs, they might manage profits of $300/oz which would give them about $150 million in earnings in 5-6 years, or about 9% eps, or a P/E of 11 based on no further equity being issued and 5 years forward. They'd have to improve their operating margin per ounce by around $400/oz to meet this target and go to 500,000 ounces per year. Those are optimistic targets.
Because of the further dilution and share appreciation the market cap has actually tripled since the fall, so ELR has already tripled in the past year.