ORV a No brainer I am fortunate enought to have commenced accumulation over the past few months and now ORV has become a key holding. At present my motto in the gold sector is to only own producers and just ones that I perceive to be trading at less than 2 times earnings. Remember - earnings are a trailing indicator whereas monthly production figures are a leading indicator.
To me the analysis is simply and I just base it on the EVBC numbers. They are currently producing about 5,000 oz per month which annualizes to about 60k oz.. They state thier costs, after non gold credits work out to about $600 per oz. So if they are selling gold at spot or around $1600 this leaves a cool $1000 per oz in operating earnings. The nice thing about this figure is that it means $1 million in earnings for each 1000 ounces. So I see 60k oz per year which works out to $60 mil in earnings. Compare that to our current cap of about $125 mil and this translates into about 2 times earnings. Now these number don't even factor in the earnings from Don Mario, nor do they factor in reduced costs once the headshaft is complete, nor do they factor in Copperwood. So my take is that we probably trading at about 1.5 times forward earnings. A deal such as this which is backdropped by a potential 3 million oz deposit should trade at about 7 times earnings which translates into an easy 5 bagger over the next 18 months. Which is why I am buying and buying.
I also own SAM (My top holding) plus little know ANX.
Good luck to all longs. This stock will break our very soon - based both on fundamentals and technicals. And should the price of gold start to move upwards - then my $4-5 targets will be very conservative.
Jandd