GREY:AVGCF - Post by User
Post by
DetVicMackeyon Sep 12, 2010 6:39pm
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Post# 17439066
Nice Progress in Last 10 Months
Nice Progress in Last 10 MonthsAVR is my largest holding and I'm very pleased with the company's operations so far. Ramping up production is never easy, but it seems like they will manage to get to that 100koz exit rate despite a higher than expected cash cost of $550-600. I think the most impressive feat has been on the acquisition and exploration side. We have had lots of successful drills and the newly acquired properties are poised to have more. Going forward, the mineral resource update in Q4 is looking juicy.
Assuming $1250 gold, cash costs of $600/oz with 100koz (80koz attributable), AVR's operating cash flow multiple would be ~4.0x in 2011. However in 2012 with costs of $550/oz on 200koz production (160koz attributable), the company's OCF would be ~2.0x with a LOM of 9+ years. I don't know what the average OCF multiples are, but for juniors I'd guess 5-8x and for mid-tiers 8-12x? Even though West Africa may not be the safest region in the world, it sure has excellent high grade ounces of gold and Avion knows how to find them.