RE:RE:great NEWS 0.60+ tomorrowHi oilsyd,
Don't forget abut tax and financing charges, which will reduce FCF somewhat from the figure you're assuming.
Still exceptional value, neverthless. North of C$1/share seems fairer value to me, on my assumption of $70m of post tax-FCF, and allowing for US$300m of debt (making an EV at C$1 of ~US$650m).
Of course, that's on the basis of $1,200 gold. I estimate that each $100 change in the gold price changes the pre-tax FCF by US$30m. If a sensible EV is assumed to be 10x the post tax FCF (i.e. 10% earnings yield) and I assume 30% cash tax, that yields fair C$ share prices as follows (allowing for US$300m of debt in the EV), according to the gold price
Gold Price Fair share price
$1,100 C$0.17
$1,200 C$1.16
$1,300 C$2.14
$1,400 C$3.13
$1,500 C$4.11
Shows just how massively geared we are to the PoG!
Cheers,
Mark