New Found Gold Corp V.NFG

RE:NFG metrics, using Fosterville 2021 Q1

[Global1966]

JRafflesUK wrote: NFG metrics, using Fosterville 2021 Q1 costs of:-

• 228 USD Cash Cost per ounce.
• 423 USD AISC per ounce.

 
At the recent NFG SP high, the company cap was ~ CAD2bn = USD1.6bn
 
The NFG AISC cost should be much lower that Fosterville, due to the lower depths of the ore.
 
Say, 400USD and the price at production and going forward averages 2000USD.
 
This gives a profit of 1600USD per ounce.
 
Therefore, at the recent NFG SP high, the market cap was USD1.6bn
 
NFG was therefore valued at the equivalent of 1m ounces of gold at the profit rate of 1600USD per ounce.
 
The above assumes that the NPV of the future cash flows is made without discounting, but applying a discount may not be needed, as the future gold price reflects the interest given by depreciating fiat money.
 
The valuation of NFG at the production profit on 1m ounces seems to be on the low side, when the exploration numbers could already be indicating many multiples of 1m ounces.
 

It will be interesting what the initial resource estimate is in 12 to 18 months time. Bob Moriaty, in one if his blogs, did a back of the envelope calculation of 1.6 million ounces on Keats alone. And that was before they got down to 425 metres and open at depth.