What to Expect for rest of 2012 Imo the next two quarters of 2012 will be a make or break NWM. In fact, it will clearly prove management capability and test shareholder confidence. Here is why,
They are on track to produce 25,000 oz of gold for 2012 and have already produced total 9,590 oz as of end of Q2 at an avg cost range of $689-$804/oz. That leaves 15,410 oz to be produced Q3-Q4. Latest NR mentions that cost is going towards anticipated life of mine cost of $900. Let’s assume this is the average cost. Also assume that Q3 will produce 40% of remaining gold to be produced and Q4 will have increased production of 60% of remaining gold to be produced for 2012.Using POG of $1700/oz, and 60% average earnings (conservative, but better than Q1 & Q2 earnings – ideally it should be much higher as payout have already been made for SART plant etc ) :
In Q3:
Metal Revenue: (0.4)*15,410*(1700-900)= $4,931,208
Earnings: (0.6)*($4,931,208) = $2,634,725
Earnings per share: $2,634,725/502,926,111 = 0.0052
In Q4:
Metal Revenue: (0.6)*15,410*(1700-900)= $7,396,800
Earnings: (0.6)*( $7,396,800) = $4,438,080
Earnings per share: $4,438,080/502,926,111 = 0.0088
Total Earnings for Q3-Q4 is $7,072,805. Add that with Q1 and Q2 earnings and the company will have minimum $10M in the bank. Numbers above are quite loose and conservative inputs..