RE: RE: RE: Talk with Gary Lindsey JonE - I do fully understand that a rollback in itself has no effect on the PE multiple/value. What a rollback will do is effect the supply/demand dynamics of Aurcana. Right now Aurcana's shares are only available to less then 1/2 of the investment dollars available because of it's low share price. As it now stands, Aurcana SP would have to rise by 500% before most Funds are allowed to get involved.
If we round off AUN current share count to 500MM, to acheive a $5 SP at a P/E of 15, we need an EPS of $.75. That will require a profit of 375MM. Thats 15MM ounces of silver at a profit/ounce of $25. (I know Lenic said we have a negative cost/ounce but expect that to change 'cause I don't think that Shafter will produce the same ratio of by-products that La Negra does). What I'm trying to say is that it could be 2015/16 before we get to $5/share with the current share structure.
If we do a 5-1 rollback, we essentially have a $5 SP right away. All of a sudden, all these Funds see an extemely attractive growth story that they're allowed to have a piece of. Keep in mind that Funds are slowly starting to see that PM stocks should be a larger part of their porfolios in the current economic climate. Who won't want a piece of Aurcana? Read: Everyone fighting to have a piece. In such an environment we can easily see P/E multiples reach the 30s and 40s. Such an event can bring Aun's SP from $5 to $35 by mid-2013.
My math is obviously back-of-the-envelope figuring, but if a rollback is done for the right reasons, it can be a powerful tool.
That's just my 10 cents (just did a rollback :) )
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