Future Cash Flows Claude has went from .8 million oz in 2008 to 4.09 million oz in 2012. This is a fantastic rate of asset growth in 5 years. They have spent their cash flows doing this.
They are really an exploration company that is dabbling in production. How can you value an exploration company on cash flow? Their Seabee operation is high grade narrow vein and because they have been successful in generating cash flows, debt and dilution, they have managed to find 1.3 million oz in the Seabee camp. Some of this is very high grade and gives them a buffer. So, they have managed to build 20+ years of production with just their small mill. If they want to reduce the life of mine to say 10+ years then they have to build another mill or expand the current mill to get to 100,000 oz. per year. If they were to stop being an exploration company then they would have all the extra cash flow to increase production.
If they expand their current mill even more( they just expanded 20%) then they still have to truck ore 8 miles. The Santoy Gap has high grade so truckiing still makes it profitable but this adds diesel overhead that wouldn't be there if they built a new mill at Santoy Gap.
Once they get to 100,000 oz the next step is to use the profit to get the Madsen Mill back to running so they can go after the 1.3 millon oz of high grade there. This would be a copy cat of Kirkland Lake.
So in order to calculate future cash flows, you need to know what road Claude will take. All of this is super exciting because very few companies have the assets to put this plan together. This is the long term growth that many investors have chosen to buy a ticket for.
Claude is like a leveraged gold option that never expires. They do have to stay in business in order to collect on that option if gold goes up.
So, in order to calculate future cash flows 2014 ,2015, 2016, 2017 you need to speculate on how long all of this takes to come together.