Compare Nord with HRG - Need Help! I plan on posting messages on the Nordgold board within the LSE. I want to promote the advantages of HRG vs Nordgold but need the net profit values for Nordgold which I am having a very rough time finding anywhere. No wonder they are having problems trading NORD up since its listing with the LSE.
So far I have the following info:
NORD: quote (Feb1/12) 7.50 US$ LSE, 2.7 B $ cap, 359 M shares, free float 10.6 M but contemplated on raising it. Production: 754 Koz Au in 2011 vs 589 Koz Au in 2010
Cash cost: 677$/oz in 2011 vs 557 $/oz in 2010
Cash Flow: 300 M in 2010
75% of HRG was acquired in end of 2008
Net profit cannot find anywhere! same for net per share
HRG 1.24 $ CAN TSX Cap: approx 1.0 B $ Float:799.5 M, fully diluted: 868 M shares
Production: 374 Koz Au in 2011 & 330 oz in 2010 cash cost 710$/oz Au in 2011
Net profit: 160 M (e) in 2011 or 20c/share vs 120 M in 2010 or 15c/share
Net cash flow: 200M (e) in 2011 vs 168 M in 2010
If we consider that Nord = 1.8 x HRG, i. e. the cap is 2.7 for NORD so the cap for HRG should be at least 0.55 x 2.7 = 1.5 B or 1.85 $ per share.
Thus we could promote HRG at the LSE site of NORD in the following way:
HRG would be valued at 0.55 x 2.7 = 1.485 B $ cap or 1.86 per share instead of thew presently quoted 1.25 (approx) for a discount of 33% based on the fully valued price of 1.86 or 49% based on the presently actually quoted price (TSX) of HRG.
Thus you get HRG for say 50% discount !
And that is valued against a Nordgold which is already heavily discounted against other mid tier gold producers.
Comments please
2 cents worth from Wolf E