Adding @ $0.05 this morningTechnically the stock looks the bet it has in over 3 years on a technical basis. It has broken out and held above its 200 day moving average which it has been unable to do in the past and is now making new 50 WEEK highs, in addition to 52 week highs. We finally have an up-trend to work with here and the 20 day moving average is providing support @ $0.05 to be bought up on any weakness.
Fundamentally at current gold prices the stock if it can begin producing should make roughly $4 million dollars over the next year.
$1200 gold price vs. $800 cash costs = $400.00 per ounce in margins
15,000 ounces of gold @ $400 in margins = $6 million dollars
After tax = between $3 to $4 million dollars in cash flow
With a market capitalization of roughly $15 M dollars and a conservative case of $3.5 million in cash flow, we should be trading at at least 10 times cash flow, if not higher given the fact we are in Quebec, one of the most sought after mining regions in the world.
10 X cash flow of $3.5 million dollars would give us a market capitalization of $30 million dollars or $0.115 a share, over an 100% gain from these prices.
The $0.115 share price would also be giving NO value to the deposit that we have already proven up which is an easy take-over target in a safe mining jurisdiction for any major or mid-cap companies looking to add easy ounces at a very cheap price.
If any take-over talk circles this stock should be trading multiples higher than the current share price and double digit share price should be the new norm.
Using a conservative base case of 3 million ounces and a take-over price of a minimum $20 million dollars per million ounces proven up, GBB would be a take-over target up to the price of a $60 million market capitalization, which is only looking at this company as an explorer, not the producing side which is fully feasible given we acquire another permit.
Explorer potential / Take over target = $60 million market value or $0.20 cents per share
10 X cash flow for production company = $35 million dollars or $0.115 cents per share
Realisitically this could see a 400-600% increase especially if the price of gold continues the way it has been as of late.
Personally I feel anything under $0.10 to be an absolute steal and the company should enjoy a re-rating like other junior companies have once this stock reaches the $0.10 cent market and back onto people's radar.
While I think the talk of $1.00 - $2.00 share prices are a litltle bit ridiculous on this board as that would give GBB a market capitalization of $350 million dollars (higher than that of producers), I do think a share price between $0.20 - $0.35 is very likely and would not be surprising as the precious metals market continues to heat up.