Wheels Group Inc GRFJF

RE: Trading at less than half NAV now?

[nwtfe]

Hey Babe, My apologies. I didn't realize that the presentation had been updated in December. I'm sure that $416 was quoted in the previous presentation as total cost (i.e. Cost of Sales, all Royalties & Capital Costs). I wouldn't be so sure, except that I made a point of noting it since it is not cheap (but by no means overly expensive either). Calculating NAV is a bit of a tricky matter. Discounting future earnings is essential in order to give a true NAV. Then the question becomes what discount rate to use. Personally, I prefer to look at WGI in terms of Earnings and Cash Flow potential. Here is a sample of what I posted many moons ago: Production Hedged 66 000 Oz @ $385 profit ($801 - $416 Total Cost) Production Non-Hedged 100 000 Oz @ $385 profit (Assume Avg Oz of G at $801 - $416 Total Cost) Total Net Income of $63 910 000 Total Shares, Warrants, Options Approx 143 Million Total EPS fully Diluted $0.447 Today $801 looks like a bit of a conservative estimate, but it seemed aggressive back then. Plug in any POG you like and then find an appropriate PE multiple. IMO WGI is a good investment. Balance sheet is good. Production is starting and resources should be proven up. Great management and a rising POG. Not many of the Juniors have moved yet. Maybe a sign that the market isn't yet convinced that the rise in gold price is for real. It will be soon!