Trailing Fair Value of MJS Thank you for that fundamental value analysis of PRG fair value.
I have just one comment ....the cash is held by PRG, if I'm not mistaken .
I will do the trailing valuation based peer based on price to earnings .
My research shows that all Chinese gold producers have debt , so in that regard an EV price to earnings would be more appropriate .
However, to avoid those calculations but noting that price to earnings fair value will be more conservative as PRG has no debt , I will do a very simple trailing FV.
I also note that profitable Chinese gold producers pay a tiny dividend .
As an exemplar, I have chosen Shandong Mining.....which trades at 49.3 times net earnings and pays a dividend with a yield of 0.49 %..ie it trades at over 200 times its dividend
I choose F2022 as the trailing year, even though that year is on the downside of the depleting SJ pit.
In that year, MJS reported net earnings of $4,5 million USD which is about $6 million in C$.
So, trailing FV would have been about $300 million cad ( $6 **49.3 ) or about $0.30 per share .
At a dividend yield of 0,50 % , MJS would have to pay an annual dividend of 1.5 cents CAD ( $0.30 ** 0.50 ) to achieve this valuation on the HKEX.
Its fairly easy to convert MJS fair value of $0.30 to PRG by dividing by 2 but add the cash of about $0.045 per share to PRG for a fair value of PRG close to $0.20 cad per share
This is very conservative as Phase 2 higher grades will more than double production and net earnings .
And, we have plenty of cash and rapidly increasing cash flows with which to pay a dividend far greater than 1.5 cents per year .
GLTA