Summary and Outlook:
I am very confident in the following conservative forecast:
ounces produced: 40,000
once sold (minus smelting fees): 35,000
Total production cost: $750 per ounce
Average annual gold price: $1850
EBITDA: $38.5M
Net Income: $20M
P/E = Share Price / (Net Income / Number of Shares)
3.15 = $0.06 / ($20 million / $1.05 billion)
I expect a P/E of between 10 and 15, which equates to a stock price of between $0.20 and $0.30
Fingers crossed for accelerated buyback program, dividend, new promising projects.
Comparison (both pay dividend):
Barrick Gold PE Ratio: 18.66 for May 12, 2022
Newmont PE Ratio: 52.23 for May 11, 2022
I think Majestic will either pay a dividend in 2022 or significantly increase the share buyback program.
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I think they'll announce a $0.01 dividend sometime in May or June.
Why?
- 42 million cash
- Gold price outlook remains bullish
- - No scams or anything by the Canadian company, in the last 2 years MJS has come a long way to the point:
- probably 20 million net income in 2022
- IPO Sinogold: The purpose is to collect money for the expansion of the mine. I'm not an expert but with 40 million cash + cash flow you should get paid even without an IPO. I think with the dividend you will sell us the IPO (reduction of the stake from 94% to 75%) and you will also have the means to pay for the expansion. I also think that growth will be generated by the IPO, which more than compensates for the decline to 75% participation.
I'm looking forward (overly optimistic or not) to the coming year with MJS based on the fundamental data
Regards
Richard