GREY:AVGCF - Post by User
Post by
DetVicMackeyon Oct 21, 2010 1:06pm
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Post# 17593772
Target Price for 2011
Target Price for 2011Using an operating cash flow multiple of 8x on 398.84M shares (basic + in the money derivatives), here is my valuation for AVR in 2011:
($1300/oz - 550/oz cash costs) x 100,000oz x 80% = $60,000,000 OCF
$60M x 8 / 398.84M = $1.20
This valuation is based on production alone and does not consider EV per resource ounce. I expect great things coming from the drills which should add 50%+ to the current M&I resources. One could make the case for a higher multiple based on that. Also when production doubles, so too should the target price.