RE:end the week at 0.80Actually I realised there ws an error in that original post/calculation of mine: I was looking at gross debt when calculating EV, when of course, I should have used net debt, i.e. US$238m, allowing for $62m of cash already on the balance sheet. That alters the fair share price figures to:
Gold price Fair Share Price
$1,100 C$0.35
$1,200 C$1.35
$1,300 C$2.35
$1,400 C$3.35
$1,500 C$4.35
So, each $100 on the price of gold, corresponds to C$1 on the share price, by my reckoning. Nice round number! :0)
Also worth noting that if gold can move & stay above $1,300/oz, net debt should be almost cut in half by the end of 2015 and the company would be well placed to develop Hounde, adding another 150,000oz+ p.a. of low cost production. However, unless the share price moves back above C$2 by then, I doubt we'll get the chance to see that - because the company would most likely have been bought by a larger player or a PE house that can see the value that the market isn't yet recognising.
Now, before I get too carried away, we'll just have to wait & see whether the current gold rally continues - and whether other investors cotton on to the massive potential upside here.
Cheers,
Mark