RE: My estimate PositionTradeJust watch the money flow. People have voted with their money with La Blache production. Look at these recent buys in the last 2 weeks, do you think they bought RGX just for a trade? Maybe some people do, but a great majority of them bought the shares for production, and many of them are block trades. So, the big boys already voted for production with money. people can make all kinds of probability and estimation, it is the vote of money that will be most important.
Based on the recent mineral values, and based on the newly announced metallurgy process, I now reduce the mining cost to $100 (from $200) per ton. This is just my own speculation at this time, but as the company now consistently saying LOW cost, I really have no case of using of high cost $200 per ton any more. Note that many gold companies will not survive if the mining cost is $100 per ton. With $600 recoverable mineral value (not just in situ metal value), and $100 mining cost, each ton will now at least $500. When the pilot plant starts in Q2 2012, we should have 0.3M ton of production per year, yielding $150M income, divided by the projected 200M fully diluted shares, we got
.75 income, multiplied by a reasonable PE of 30, we got $22.5 per share value.
This assumes that fully diluted shares will be 200M shares (currently about 75M, but likely to be 115M very soon as all the warrants will be exercised, and also assumes all the options will be exercised. Take an extra 80M shares just to make sure the number is very conservative.). KRO that has a gross cost about 74% (most recent quarter) commands a PE of 20, RGX with cost only 16% ($100/$600), should command a high premium (such as 60, why? 74% cost PE 20, RGX will be making 3.33 times more money for each dollar spent, so proportionally PE should be 60. Just check the income statement at Yahoo!Finance on KRO, verify their gross margin carefully on the most recent quarter -- $280M cost versus $276M revenue ), but on the conservative side, we take PE=30.
Thus, why chase
.20 profit or even $.50 profit, as it now looks that institutions bought a large number of RGX shares for production for a huge profit around Q2 or Q3 2012, and they will be targeting for 1000% to 3000% gain, with average about 2000% gain?