RE:RE:RE:Possible Reason?Harmonicca wrote: Harmonicca wrote: jjeerryy wrote: the big money is getting out of gold to put that money in a better investment elsewhere?
Them and they ?
How do you price an exporation stock? Ozs in the ground x a $ per oz? And when you do that you compare to past transactions. Similar grade, location, market cap? Its not easy to do and a lot has to do with short term sentiment. WM and GBR are the 2 major explo plays at the moment. They have similar market caps.
Now look at a producer like kl or abx. They trade a certain earnings multiples based on outlook, years reserves, and a host of other things, but all things being equal you can calculate what they should trade at as the pog moves up or down.
Not so with explo stocks. They are sentiment based and in the short term, drill result based.
H
Example:
abx produces 6m oz per yr. What should it trade at if the pog rises $200?
6,000,000 x $200 usd / 1777,000 shares o's .70 after tax / .74 to cad x current multiple. That much more than today. And the same if the pog declines.
Simple. Whats wm worth? We dont know how many ozs they have or the grade so I have no clue. Dont get me wrong, its a very good play. Which is why I watch it.
H
Add 3 zeros to the o/s on abx. 1,700,000,000.
H
(ignorant)