A short stop at a libraryI'm still on that 12 week vacation!!! It's been an amazing trip that started on June 15th....only 8 more days of fun in the sun and surf.
I was expecting my net worth to be higher when I returned compared to where it was when I left and that is the case so far. By about 18%. I expect it to be even higher in the next 10 days.
The level of posting on this board has given me lots to read and think about over the last three months. It has been hard to read and not comment. My I-touch lets me read everything but only post replies in the subject box on Stockhouse.
The delays caused by the fires were unexpected and without them the drill program should have provided more news and results. But it has just delayed the outcome..not materially changed the results. I guess we may have fewer results to base the 43-101 on. But the timing of the news may add more bang for the buck as we get into the strong gold season from here to December.
I am going to re-post my GCU valuation model for inclusion in Barn's compendium of price predictions. It was crated in late January and I think it still holds up well with a number of variables.
Please pay close attention to the second set of valuations. As a development company with a 43-101
This is the stage we are currently progressing toward. Currently we are in the first stage with some where between 5-7 million ounces.
The price is moving back to value the company at this level. New 52 week highs are only one or two new releases away in my opinion.
I am still looking at a price of at least 8.00 by the end of the year. Maybe much higher.
Lets hope we don't get a buyout offer in the short run. I want to see the full set of drill results for this drill program, the to be announced winter drill program and the 43-101 before we get a buyout offer....
One last point. Gold is $500.00 higher then when i did this projection....
See you in a couple of weeks....
So here it is.....
Size of the known deposit, exploration potential and the valuation placed on these are the key drivers of our price.
Lets pick three deposit levels that have been thrown out as the ultimate size of our resource.
4.4 million
7 million
10 million
Fully diluted number of shares 117 million.
As an exploration company
The number that has been thrown around for resource valuation is 100.00 dollars an ounce.
4.4 million X 100 = 440,000,000 / 117,000,000 = 3.76 per share
7 million X 100 = 700,000,000 / 117,000,000 = 5.98 per share
10 million X 100 = 1 billion / 117,000,000 = 8.54 per share
As a development company with a 43-101 ( 1/3 resource 1/3 inferred 1/3 potential) & a pre-feasibility study
( We will have both of these later this year.)
The value of the in ground resource will go up to 150/175/200 per ounce?? So 175.00 for this exercise.
4.4 million X 175 = 770,000,000 / 117,000,000 = 6.58 per share
7 million X 175 = 1,225,000,000 / 117,000,000 = 10.47 per share
10 million X 175 = 1,750,000,000 / 117,000,000 = 14.95 per share
As a near term producer with a bankable feasibility study & 43-101 (1/2 resource 1/4 inferred 1/4 potential)
(This may be two years away)
The value in ground goes to 300 per ounce.
We need to raise cash for drilling and operations and to build a mill.
So lets say we need $200 million and we raise it at 3.76 per share.
200,000,000 / 3.76 = 53191489 new shares( 53,200,000 rounding up)
117,000,000 + 53,200.000 = 170,200,000 shares
4.4 million X 300 = 1,320,000,000 / 170,000,000 = 7.76 per share
7 million X 300 = 2,100,000,000 / 170,000,000 = 12.35 per share
10 million X 300 3,000,000,000 / 170,000,000 = 17.64 per share
As a producer
(This could be 3-4 years away)
500 dollars per ounce in the ground.
I think gold will climb at 20% a year. In 4 years the price could be 2,800.
We will use 2000 as a very conservative estimate.
200,000 ounces per year production (gold at 2000 per ounce) cost to mine 450 per ounce
profit of 1550 per ounce
200,000 X 1550 = 310,000,000 / 170,000,000 shares = 1.82 per share.
Net Present value discounted at 1.82 @ 10% = 15.20 (per share NPV ) X .50 (Uncertainty) = 7.60 per share
4.4 million X 500 = 2,200,000,000 / 170,000,000 shares = 12.94 (in ground gold value) + 7.60 (NPV) = 20.54
7 million X 500 = 3,500,000,000 / 170,000,000 shares = 20.58 + 7.60 = 28.18
10 million X 500 = 5,000,000,000 / 170,000,000 shares = 29.41 + 7.60= 37.01