All quiet on the Western Front
Been very quiet on the SA board of late.
I saw this post on the Gold Canyon Resources bullboard. Gold Canyon Resources with a market cap in the 200 Million region have been releasing drilling results lately that have got the stock moving. The post relates to a debate as to where their SP is headed. Some relevence to what to expect from SA.
As an exploration company
The number that has been thrown around for resource valuation is 100 dollars an ounce.
4.4 million X 100 = 440,000,000 / 117,000,000 = 3.76 per share
7 million X 100 = 700,000,000 / 117,000,000 = 5.98 per share
10 million X 100 = 1 billion / 117,000,000 = 8.54 per share
As a development company with a 43-101 ( 1/3 resource 1/3 inferred 1/3 potential) & a pre-feasibility study
( We will have both of these later this year.)
The value of the in ground resource will go up to 150/175/200 per ounce?? So 175 for this exercise.
4.4 million X 175 = 770,000,000 / 117,000,000 = 6.58 per share
7 million X 175 = 1,225,000,000 / 117,000,000 = 10.47 per share
10 million X 175 = 1,750,000,000 / 117,000,000 = 14.95 per share
As a near term producer with a bankable feasibility study & 43-101 (12 resource 1/4 inferred 1/4 potential)
(This may be two years away)
The value in ground goes to 300 per ounce.
We need to raise cash for drilling and operations and to build a mill.
So lets say we need $200 million and we raise it at 3.76 per share.
200,000,000 / 3.76 = 53191489 new shares( 53,200,000 rounding up)
117,000,000 + 53,200.000 = 170,200,000 shares
4.4 million X 300 = 1,320,000,000 / 170,000,000 = 7.76 per share
7 million X 300 = 2,100,000,000 / 170,000,000 = 12.35 per share
10 million X 300 3,000,000,000 / 170,000,000 = 17.64 per share
As a producer
(This could be 3-4 years away)
500 dollars per ounce in the ground.
I think gold will climb at 20% a year. In 4 years the price could be 2,800.
We will use 2000 as a very conservative estimate.
200,000 ounces per year production (gold at 2000 per ounce) cost to mine 450 per ounce
profit of 1550 per ounce
200,000 X 1550 = 310,000,000 / 170,000,000 shares = 1.82 per share.
Net Present value discounted at 1.82 @ 10% = 15.20 (per share NPV ) X .50 (Uncertainty) = 7.60 per share
4.4 million X 500 = 2,200,000,000 / 170,000,000 shares = 12.94 (in ground gold value) + 7.60 (NPV) = 20.54
7 million X 500 = 3,500,000,000 / 170,000,000 shares = 20.58 + 7.60 = 28.18
10 million X 500 = 5,000,000,000 / 170,000,000 shares = 29.41 + 7.60= 37.01