Justifying a current $0.30 valuation for Sitka I played with some numbers yesterday and came up with a $0.30 valuation and I'm interested what others think and why.
I understand that we don't have enough ounces proven yet to get full value, but based on the assumption that we reach 2 million oz's gold/gold equivalent on the Burro Creek property in Arizona, this is what I came up with. I focus on Burro Creek because it already has a resource and it is much further along in the process than Nevada or the Yukon. In fact I expect to see an updated resource in 6-8 months, where I hope to re-evaluate these numbers. Hopefully a final resource within three years on this property.
Please feel free to dissect, I would love to learn how others dissect companies.
We can all agree that the gold/silver resource numbers are real, as they are posted on Sitka's website.
5,000,000 oz's silver at today's price $23.50 per ounce = $117,500,000
120,000 oz's gold at today's price $1875 per ounce = $225,000,000
for a total of resources in the ground proven so far of $342,500,000
if you devide that by the number of shares (57,000,000) we get $6 per share.
if we get only 5% of that from a major down the road, it gives us $0.30 based on the ground at Burro Creek only, it doesn't count Nevada or the Yukon.
if my math is off, I would love to know where.
cheers
L4D