GREY:LACHF - Post by User
Comment by
RedHorizonon Jan 11, 2009 2:45pm
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Post# 15697340
RE: RE: Book Value
RE: RE: Book ValueNERGY:
I agree that looking at price to book is the least favorable to LMA. That's what I think is so interesting, that by any measure we can come up with LMA will be severely undervalued. Here's another comparison which is telling.
Both LMA and Western Goldfields have a cost of production of $500 per ounce. WGW recently reported better numbers than that but are saying that long term it will be about $500/oz. So then if we value them by resource ounces we get:
WGW: enterprise value = 150M shares x $1.6 stock price + $86M in debt = $326M for 4.3M resource ounces = $76 per resource ounce.
LMA says they will have 2M resource ounces after all 2008 drilling is added in: so 30 cents Canadian = 25 cents US
25 cents U.S. x 142M shares + $7.5M U.S. debt = $43M enterprise value for 2 million ounces. That's $21.50 per resource ounce as compared with WGW which has very similar operating costs. WGW is valued about 3.5 x as high.