DanWarren wrote: surething1111 wrote: BuccneerIslnd wrote: Min capex $2b for a decent sized mine with mill. That adds 400m shares at todays price regardless if you pay for it or if its worked into the calculation by an acquirer. Now you have 568m shres os x 110$=$57$b
Dan Warren is saying nfg will have a market cap of more than twice aem. And 1.5 x abx, and 1.5 times nem.
You guys should be paying me for injecting a dose of reality on this board.
Bucc of the napkin
Bucco, give your head a shake.......2 Billion for a simple 4-5000 tpd ball and flotation setup? We're not talking a Filo with a minimum of 100,000 tpd throughput.
That's the beauty here, the capex will be a very small percentage of that number and will be accomplished largely by organic methods.
Please go back and read chapter 4 in your Geology for Dummies 101 handbook.
Best
S
..........I 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. Keep in mind the discounted 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 million shares for NFG, as under my model I assigned 220 million shares 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, 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, including his gender....... Regarding my model, I assumed the price of gold would gradually rise to $3000, 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.....Next, assuming the Queensway project eventually is assumed to discover 15 million oz, and to mine only that amount, does not seem unreasonable, given what's already been dIscovered,, 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. Quenten Hennigh has already indicated that just on North QW, it appears to be bigger than Fosterville, 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. The gold is near surface, and North QW is right off the Trans Canadian highway, with electric transmission lines running right along the highway, and Gander with 10,000 people just around ten miles away.....I assumed gold production would start out slow, but build up to 500,000 oz per year. Given that QW has high grade ore, the assumption is that QW will have production costs similar to Fosterville, 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, 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, and the possibilities that NFG, the Big Fish in the pond in the developing Newfoundland gold district, wouldn't find more gold in these quite possibly very deep formations on QW, OR buyout other smaller Newfoundland companies that also find commercial deposits, is a quite conservative assumption. 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, once it reachws full success with QW.......Finally, I used a discount factor of 5%.......Bottom line, is my math correct? ........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.........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 just recently. So, it looks like NFG may well be thinking to start mining asap. 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.