GREY:LACHF - Post by User
Comment by
ak27on Mar 14, 2010 5:15pm
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Post# 16881523
RE: RE: RE: RE: $3.70 Target
RE: RE: RE: RE: $3.70 TargetWe need few catalysts in addition to the annual financial to propel LMA share in the $3 to $5 range.
Any of the following releases could trigger significant price appreciation:
1. Positive VMS scoping study in April
2. Commencement of White Foil operations in April
3. Consistent flow of drilling results in any one of multiple sites announced earlier in March. As there will be series of drilling throughout 2010, LMA may be busy on the PR front particularly in the second half of 2010.
Lastly, here is my LMA valuation based on 2010 expected gold production, cost and cash flow:
120 to 140,000 AU ounces in 2010 (average 130,000 ounces).
Expected production cost - $500 to $600 (average $550).
Expected price of gold $1100. Margin $550 ($1100 -$550).
Cash Flow - 130,000 x $550 = $71,500,000.
Cash Flow per share based on 145 million shares $71,500,000 / 145,000,000 =$.493
8 to 10 times multiples for junior gold miners
8 x $.493 = $3.944 10 x $.493 = $4.93
So, LMA at its current price of $1.91 is trading at a discount of up to 62 percent to its 2010 E cash flow. More importantly, 2010 could be the year when LMA would shift to a higher gear in terms of expanding its resources and reserves. AK