Justifying Novo’s share price by projecting gold reserve.Reserve: CW/PR estimates: 6000 meters x 500 meters x 1 meter=3 mill cu meters
Est #1: 3 grams/ton. 3 x 2.6 x 3gr/31= .75 mill oz. @ Au – mining costs= net Au of $800/oz.= $600 million divided by # shares outstanding of 158,000,000= $ 3.80/ share U.S.
Est.#2: 10 gr/ton. 3 x 2.6 x 10gr./31= 2.5 mill oz @ Au – mining costs=net Au of $800/oz.= $2 bill divided by # shares outstanding of 158,000,000= $12.65/ share U. S.
Note these share estimates do not account for the Cap.Ex. of mill construction est. to be $150 million.
From this estimate it is clear that Novo has to come up with an ore reserve of at least 750,000 oz. to justify the current stock price of 3.00 U.S.
Please feel free to criticize how I came up with this estimate or submit one of your own relating the ore reserve to the huge number of shares outstanding.
I would be interested in how others decide share value of their investment in Novo?
I am long Novo, Pac, Deg, and Arv, so this should not be taken as a criticism of the Pilbara gold story.