RE:RE:RE:RE:RE:Earnings outfirecracker74,
I don't think that more than 1 out of a hundred investors understands the process flow diagram at Orovalle in Spain, or the gold production potential offered by increasing the mix of high grade oxide ore with low grade skarn. Furthermore, I doubt that more than 1 in a thousand investors understand the significance of mining costs dropping from $120 USD/ metric ton to $80 USD/metric ton in FQ3 2020.
The disconnect between Orvana Minerals fundamentals and the current stock price is exemplified by the following:
- ORVMF stock closed at 22 cents TODAY in USD on the OTC and the trading volume was a laughable 4308 shares.
- Over on the TSX, ORV.TO stock closed at 29 cents TODAY in LOONIES on 40,500 shares in trading volume.
Given that Orovalle has $6 million dollars in unsold gold, copper, and silver inventory as of June 30,2020, the first question is whether that gold dore and copper concentrate will be sold by the end of fiscal 2020?
In my production model for FQ4 2020, I assume that all unsold gold and copper concentrate left over from FQ3 2020 is sold during the quarter. I also assume that the Euro goes to $1.35 USD, and the oxide ore ratio at Orovalle goes to 55 percent in FD4 2020. My model assumes a 10 percent gold loss to the ball mill baffles as a result of gold plating on the inside surfaces of the ball mill
.
With those conservative assumptions, my bearish case for OROVALLE is 19,779 ounces of gold production in FQ4 2020 at an average gold price of $1795 USD/oz, an AISC of $1093 USD/oz, and $13.3 million USD in profit or 9.8 cents per share.
My bullish case for Orvana is that the oxide crews get into high grade sections of Area 107 and produce 26,998 ounces of gold at an average price of $1849 USD per ounce resulting in an AISC of $775 USD per ounce, and $28.7 million USD in after tax profits, and EPS of 20.5 cents per share. Based on my bullish case and assuming fair value at a PE of 20, Orvana Minerals should be priced at $16.40 USD per share. On my bearish case, Orvana Minerals should be priced at $2.64 USD per share. So firecracker 74, your only question is do you get in and buy ORVMF while this stock is at a STUPID UNDERVALUATION AT 22 CENTS PER SHARE, OR DO YOU WAIT FOR WARREN BUFFET TO BUY 20 MILLION SHARES ON A MONSTER GAP UP IN THE SHARE PRICE?