RE: Gold to hit $1000.00/ounce this yearIf I were a buyer of ARU, right now, I would look to buy it for about $US 2Bn. My prognosis is based on:
- 12M ounces in the ground (10M is pretty much in the bag)
- $0.4Bn to build the mine. All paid for by the ARU buyer.
- $675/oz price realized per ounce
- $175/oz for extraction
- $40% cut for the Ecuadorian gov't
- Buyer will pay 60% for this potential, pocketing 40% for themselves, and leaving any upside in the price of gold for themselves
If there is precedence to suggest the Ecuadorian gov't would take a lower cut, then somebody, please point me to it.
Therefore, based on the 33.3M shares outstanding and a 12M ounce ore body, the present price per share should be about $US 60. This matches pretty much what a lot of analysts are saying. We are discounted by 50% for uncertainty.
It is noted that I have not looked at any outstanding options/warrants/rights in this calculation. I am admittedly too lazy to look them up tonight.
Larsen6