VGCX 2021 Actual vs. 2024 Projected Net EPS ComparisonOK, so before MVargas our someone else shoots the messenger, let me first say I'm well aware that there are various factors that affect EPS (i.e. ore stacked grade, tonnes stacked, wildfires, fuel, salaries, etc, etc) but just think about this for a minute.
In 2021, VG produced about 164,222 ounces of gold, which is about 15 to 20K ounces less than the 185K ounces expected to be produced in 2024. Recognized revenue in 2021 was $356.5 million (based on sales of 158,736 ounces sold for the year @ $1,790) and in 2024 will be well over $400 million (and probably more than the $434 million revenue noted on the technical report that was calculated using US $1,700 ounce gold) considering that we're now using US $2,200 an ounce as a realized gold price for 2024.
The 2021 vs. 2024 AISC margins of about $600 per ounces is very comparable. And 2024 estimated Capital Expenditures in 2024 are actually guided to be about C $18 million less than in 2021. And now that VG management just issued C $10.5 million in Flow-Through shares, which as MVargas recently pointed out must be used for exploration, there's now essentially another C $10.5 million less that won't need to be funded from cash flows. This in effect making that $10.5 million available to be used for other purposes like paying down more debt. So in a sense you could say that ~ C$18 million less Capital Expenditures in 2024 added to the C $10.5 million more cash that now won't be going towards exploration is like having ~ C $28 million more free cash flow than in 2021 which could all be applied against debt reduction, and that's in addition to the extra net cash flow that will undoubtedly be created after all expenditures and taxes are paid.
So now if VG can end 2021 with net earnings of $1.77 per share in 2021 despite lower gold production, lower revenues, and about C $28.1 million less in Capital Expenditures (again...when you factor in that the $10.5 million less from the Flow-Through Shares funding that will now NOT need to come out of earnings) ....AND roughly equivalent margins of ~ US $600 in 2024 vs 2021, if not better, it's pretty hard not to conclude that VG gold is going to have net eanings in 2024 that are a lot higher than the .69 cents that RBC is currently projecting. Will VG earn C $1.77 a share again in 2024? Perhaps not $1.77 but definitely more than .69 cents. The first couple of quarters are going to set the tone and answer this question.
Now, anyone care to take a stab at what you think 2024 EPS will be? Have at er but please back it up with some numbers and facts, not just a number pulled of thin air. And Tripple D, if your going to just post that everyone knows the EPS will be higher and not add some detailed analysis please don't bother.
Here's the links I used, the numbers and facts are all there:
2021_vit_q4_mda.pdf (vgcx.com) vit_q4_dec23_mda_2024-02-20_final.pdf (vgcx.com) Here's the info I extracted from these links:
2021 The Company
incurred a total of $107.6 million in capital expenditures during the year ended December 31, 2021:
(1)
sustaining capital of $59.9 million (including upgrades to the material handling system including chute liners of $12.8 million, scheduled capital component rebuilds on mobile mining fleet of $14.6 million, expansion to the heap leach pad of $5.9 million, $7.0 million for light vehicle and machinery purchases and construction of the truck shop and water treatment facility of $18.0 million);
(2)
capitalized stripping activities of $31.0 million;
(3)
$5.7 million spend on growth capital expenditures (growth exploration and mine expansion), and;
(4)
$11.0 million adjustment to the Company’s asset retirement obligation during the year ended December 31, 2021.
2024 The Company is projecting to incur a
total of C $90 million in capital expenditures during the year ended December 31, 2024 (my wording):
(1) Sustaining capital, not including waste stripping,
is estimated at C$30 million (US$23 million) for 2024. Major items included in 2024 sustaining capital include mobile equipment rebuilds and fixed maintenance rebuilds.
(2) Capitalized
waste stripping is estimated at C$35 million (US$26 million). Capitalized waste stripping is estimated at C$35 million (US$26 million) and is included in AISC1 but is not included in the sustaining capital above. This accounting treatment for waste stripping will affect earnings and capital but will not affect AISC1 or cash flow. Question: If this C $35 million is already included in AISC and is NOT an expense that needs to be paid out of free cash flow, shouldn't this result in C $35 million more in free cashflow???? (3) Growth capital related to
Eagle Gold Mine expansion initiatives is estimated at C$15 million (US$11 million) for 2024 and includes heap leach pad expansion.
(4) In addition,
growth exploration spending in 2024 is estimated to be C$10 million (US$8 million).
_______________________________________________________________________________ OK, this is making my head hurt!
HB77