Petaquilla Minerals Ltd PTQMF

Personal Target Price

[DetVicMackey]

Using an operating cash flow multiple of just 5x on 153.98M shares (basic + in the money derivatives), here is my valuation for PTQ for calendar 2011 :

[($1300/oz - 550/oz cash costs) x 95,000oz] - (4,400oz loaned x 550/oz) = $68,830,000 OCF

$68.83M x 5 / 153.98M = $2.24

This valuation is based on production alone and current resources. Every $50/oz swing in either sales or costs is about a
.17 change all else being equal. The company should be increasing their M&I resources shortly and one could raise the multiple based on the new figures that ought to extend mine life. Longer term with150,000oz production and doubled resources, I think PTQ can achieve an 8x multiple for a target price over $5.85. I have 16 securities in my portfolio and this is my top holding at 22%. Capping my exposure at 30% however.