Dan the crossdresserI didn't see Bucco's ( the wannabe pirate from Fago Island) post, cuz I immediately put his daily new ID on ignore.....but, I think my math from my model is sound(then post your model and lemme tear it apart). Keep in mind the discounted(really? you know how to calculate discounted cash flow? I doubt that) cash flow value I came up with of $110 per share is in US $, not Canadian, too.......I don't know where Bucco comes up with 568(I thought you didnt read my post and yet thats what I said. I also said why 568m so read it again.) million shares for NFG, as under my model I assigned 220 million shares(so you are going to build a 500k oz a yr mine for $300m. Thats pretty cool Dan) as the final count before NFG begins mining 500,000 oz of gold annually from just North Queensway, as they continue to explore the entire QW project.......but, Bucco the wannabe pirate is confused about a lot of things(not really. I dont even drink anymore), as a couple of the butt pirates from Fago Island, on a weekend bender in St. John's, revealed to a couple of local NFG shareholders that Bucco is confused about many things(not really, I dont even drink anymore), including his gender(Im not the one wearing pink panties)....... Regarding my model, I assumed the price of gold would gradually rise to $3000(and why is that), and stay there. I think that's a reasonable estimate, and probably modest given the inflationary pressures, and the drive to move the US Dollar off of its exclusive reserve currency status(cool, and do inflationay pressures also affect all input costs, or only the pog, because if it affects all inputs costs then youre no further ahead at $3000 than you are now).....Next, assuming the Queensway project eventually is assumed to discover 15 million oz(lollipops), and to mine only that amount, does not seem unreasonable, given what's already been dIscovered(tell us then , how many ozs have they discovered to date? Betcha you cant),, mainly at just Keats, and the fact that all discoveries are open in all directions, and these types of deposits can extend very deep underground(300 m is the average). Quenten Hennigh(I dont care for henry) has already indicated that just on North QW, it appears to be bigger than Fosterville(everything looks like a bigger than Fosterville to Henry), which has already shown what, 3-4 million oz?........ the key to the model I created was that NFG would begin mining operations asap on North QW. This possibility has been discussed on the Stockhouse board, as there are possibilities to use an existing mill in Newfoundland(oh, how far away is it, what is the ore grade?). The gold is near surface, and North QW is right off the Trans Canadian highway, with electric transmission lines running right along the highway(who needs hydro when they can bathe in the lake), and Gander with 10,000 people just around ten miles away(and how many miners in 10k pop who are currently unemployed?).....I assumed gold production would start out slow, but build up to 500,000 oz per year(you have no clue). Given that QW has high grade ore(tell us what the average grade will be when they are mining it and not the headline assay grades), the assumption is that QW will have production costs similar to Fosterville((hmm Swan was/is 49 gm ore bubb), one of the lowest cost gold mines in the world. Even so, my model assumed production costs of $600 per oz to start out with(dream on), considerably higher than Fosterville, and gradually rising from there, again, a conservative assumption.......finally. I assumed that QW would be mined of ALL its gold at 15 million oz, and it would be mined out by 2037. Again, given the soil samples on South QW(worthless), and the possibilities that NFG, the Big Fish(good movie. take me to the river) in the pond in the developing Newfoundland gold district, wouldn't find more gold in these quite possibly very deep formations(300m on average) on QW, OR buyout other smaller Newfoundland companies that also find commercial deposits, is a quite conservative assumption(I dont know who to vote for next time around). With good success on QW, and the MASSIVE cash flow QW could well produce, NFG may well develop into a prominent gold producing company, and expand in Newfounland, and, with its close connection to Goldspot, find undervalued gold prospects to buy and develop across Canada(they are going to take over the world?), once it reachws full success with QW.......Finally, I used a discount factor of 5%.......Bottom line, is my math correct?(absolutely not. Stick to snowplowing) ........15 million oz of gold at $3000 = $45 billion USD........yes, you subtract out costs to produce and the time value of money. But, if NFG tops out at 220 million shares, $110 per share USD gives you an underlying value for NFG of $24 billion. And, keep in mind, the $110 per share DOESN'T mean that the share price reaches that level under all these conservative assumptions, but it DOES mean that the value of all the cash flow created DOES reach that value. Thus, much of the value will come from dividends paid out(oh boy).........So, bottom line, my model is realistic, and conservative. And it doesn't even reflect the possibility that NFG becomes a prominent gold producer, and remains in business over many years, growing even more value........maybe NFG issues more shares than my model assumes. Maybe they end up with 230 or 240 million shares. But, that wouldn't make a huge difference to this model.......The key to NFG is how much gold is on Queensway, and does NFG remain independent and mine, or does NFG sell out to BIG GOLD. The full value of NFG will take years to discover. I am hoping NFG remains independent, and there are strong signs that this is their plan, as they hired a mining expert, and granted him significant warrants(options, not warrants) just recently. So, it looks like NFG may well be thinking to start mining asap(righto). This is key. The sooner NFG can start producing gold and HUGE cash flow from QW, the sooner they can become self financing, and no longer have any need to issue shares for the cash needed to finance further exploration and the necessary costs to start up mining......if this is the scenario NFG is following, NFG would be a great, very long term hold with MASSIVE up side.(heard it all before. 100 times. And you wags have been listening to Dan Warren for how long? jeepers are you fellers in for a shock)
Bucco