RE: ******** FDN & CASH Value of ARU **********prove me wrong with numbers instead of asking me to do it.
And can you do a bit research before posting? like going to their website and look for information instead of just making it up with your 'estimate'. You can excuse yourself with 'don't have the time' and evade my numbers. $150 for inferred oz is simply unrealistic in Ecuador.
I am being kind and find it all for you. here is the numbers with GRZ:
https://www.goldreserveinc.com/corporate_presentation.asp
page 7
GRZ's capex is 638M in 2006.
@$620/oz Au and 3.1/lb Cu,
IRR 29.3%
NPV@5% 2,207M
payback 3.9years
market cap 242.72M
NPV@5%/market cap= 9.09
the figure is gonna be better with current price.
You can divide NPV@5% by half if you want NPV@8%, close enough I think. Or you can run the number with current price.
if market is valuing GRZ with this NPV/market cap. ARU should be close to it
ARU has excellent grade, no doubt about it. All it implies is a low cash cost. You can even assume $0 cash cost and run the number and see a nice number. But it wont justify its market cap relative to its peers. Heck, I am being nice and I run it for you.
Assume $620/oz Au, 1Moz Au/year, 14years mine life, 30% tax rate, zero cash cost including interest, 500Million capex.
NPV@5% 3985M IRR78%
marketcap as of today 1068M
NPV@5%/market cap= 3.73
Don't forget ARU will need few more years before going into production, but I am not going to discount that in. The figure will look even worse.
I am not bashing ARU. I just want to give my comment with numbers and people start calling me dickhead. Whatever, it is your money.