DanWarren wrote:
This is the ultimate discounted cash flow present value if NFG finds and mines 15 million oz of gold at Queensway through 2037 given the parameters of my model. This doesn't mean that the share price would reach that level anytime soon, or even ever. ....It would take years for NFG to even verify that they have found this much gold, and a significant amount of the underlying $110 value would be paid out in future dividends. Also, a significant portion of this value might be derived from NFG investing in other gold exploration properties, or even other investments.....The actual share price action would surely always be well below the $110 figure. But the long term trajectory of the share price would be up, as the value of NFG as an enterprise is progressively recognized by the markets.......also, it is entirely possible that the Queensway property ultimately reveals MORE than 15 million oz of gold....... Below is a post from a poster on CEO. I am quite certain I know who this poster is, but, it's not fair to reveal his identity. I will leave it at this that he is a mover and shaker in the gold exploration industry...... Snidely wrote: "I am not anywhere near as bullish as some people on here, but 1M oz is ridiculous. If I had to guess right now by the time a maiden resource is announced for the zone from Keats-Lotto, I would say it will be in the 5-7M oz range. Overall, I think there is upwards of 20M oz to be mined in the 9km stretch, but that is more speculative on my part and additional gold wouldnt be found until after the the initial resource is published. As for what is outside Keats-Lotto hard to say. Hoping for awesome drill results in the future but nothing solid yet to base that hope on."........ If Snidely is right just on his guess on the initial resource estimate, NFG is worth a number of times the current share price, which should be significanrky reflected by the market in share price action. Keep in mind that Snidely is talking ONLY about what has been/and possibly will be, found just on North Queensway, which is, what, maybe 20% of the entire Queensway project...... ....... My Response to Toller:..... I think I went to great lengths to explain how I derived that value figure. I'm quite good at math and putting together reasonable assumptions, and if you read my post carefully, you see that this doesn't mean the share ever reaches $110 US, but it DOES mean that this is the actual value derived over time, as much value would be paid out in dividends, and/or finding more value through growth beyond Queensway.......create your own model and see what discounted cash flow value you come up with, and explain your figures as well as I have......and, what if NFG discovers MORE than 15 million oz over the next many years?!.......... toller1 wrote:....... Dan, your optimism is over the top. Your numbers would put NFG at 24 billion! you looking out to 2037 is the stupidest prediction I have ever heard of in my life. Even your cheer leader section are cringing at this latest rant. And for fu-k sakes give it a rest on the shorts keeping the share price down. I want this thing to do well but be realistic! I think you start your day off with a hit of acid before breakfast. All the best big dreamer!........... My Original Valuation Model Post:....... ......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.
Outstanding post Dan but for brevitys sake try not to rationalize Bucs silliness and just ignore as
most people do. Toller is not far behind and may be taking acid for breakfast himself. He has
never posted anything informative and only critiques with insults.
People would not be so dismissive if your posts if they were not so long.
You have a lot to say but please use more brevity. IKE