LAKE SHORE GOLD CORP 6.25 PCT DEBS T.LSG.DB

RE: RE: RE: RE: RE: TheAce..V.PRB is the one!!

[Golfcar72]

TheAce -

I like your enthusiasm for the video and the potential, but please keep in mind the outstanding shares when doing a price comparison. 

Yes, Rainy River is about $12 ($12.35 as of 3pm EST), but their shares outstanding are 82 million. 
LSG on the other hand has over 370 million shares outstanding.  That's 4.51x the share base.

Divide Rainy River's price of $12.35 by the 4.51 multiplier and you get a paltry $2.73 per share valuation at your estimate of 5 million oz.  Based on that math, if LSG get's to 6 million oz a valuation would be $3.28 per share for LSG stock.

Again, using all of your market math that puts the number of projected oz. driving LSG's current price at 7.5 million oz., which I'm sure the consensus believes is an understatment of future reserves but a reasonable investment gamble on future proven reserves.

I know it's unpopular on the board, but I'll still reaffirm my goal of a $6-7 price target in the next few years.  I'd like to be more optimistic, but the number of outstanding shares is simply too large to support a higher price per share.  It would taken proven future reserves of over 15 million ounces (assuming a stable gold price) to send this price over $10.  I hope they can find it and mine it, but until then I'll stick to a more conservative valuation.

Is a 50% return on assets in 2-3 years a bad thing?  I certainly hope not!

Good things,
Golfcar72