RE: RE: So Far So Good I modeled a really, really, really conservative valuation for SND in Excel. If you want the spreadsheet you can inbox me on stockhouse. Here is the big takeaway, using $3.00 copper, 3 g/t grade at CSI's mine with $550 palladium price, and $3.50 natural gas, and assuming no value for NDX, TER, or RDA, I come out with a $0.86 target share price for 2013. For 2014 it's $1.06. For 2015 it's 1.28. Cash flows begin to compound here, however. For 2020 it's $3.43.
Doesn't sound like much? Keep in mind it is very conservative. Basically I model zero equity issuances, which are actually quite accretive to shareholders (sell shares at 20x forward cash flows, then buy a new stream at 5x cash flows... very accretive for current shareholders). For streaming companies, issuing equity is a good thing (assuming management knows what they are doing - which they do).
Anyway, with $3.50 copper, $4.50 natural gas and 5 g/t at Sierra Palada with $625 palladium, we are looking at ~$4.32 in 2020. So a small, realistic bump in share prices adds almost a full $1.00 in value to the Company.
Still doesnt' sound like a lot? Put it in perspective. That is a 900% return over the next 8 years. Annualized, given how compounding works, it works out to about a 30% return or something. That said, this is on a 100% equity basis. Basically, a few smart equity issuances could likely move us well over $6 or $7 in 8 years time. 1400% over 8 years? I'll take that anyday...