Post by
pmrider on Aug 12, 2011 1:15pm
Fundamental Research Report
Highlights from the report:
1) Gold Ounces of 1.76 Million ounces at a grade of 1.26 gpt
2) Valuation of .62 per share
3) Does not include the newly discovered Iris Lake or Span Lake
Interesting how they valued the deposit. They took the average of their estimate of 1.76 million ounces and the historical estimate of 234,000 ounces and came up with an average of 995,000 ounces. They gave the resource credit for 50% of the 995,000 ounces, because they assume that if is inferred (not measured and indicated) and therefore Coldstream is given credit for 497,500 ounces. Our share is 60%, approximately 300,000 ounces. The insitu valuation used is $65 per ounce giving us a value of $19.5 million.
Our current market cap is approximately $3.74 million. Hard to imagine that the 43-101 that will be coming out in September will be less than 800,000 ounces (a decent portion of this will be in the indicated category). The report in my estimation is a fair representation of the net worth of the company. Reality is that the market does not share the same sentiment.
Ultimately, I believe they will prove up more that 2mm+ ounces and it will be a viable project given the proximity to infratructure and the price of gold. It seems to me, that gold will remain above the $1,500 level for a very long time, given the turmoil in the markets, currencies and governments throughout the world. I suspect that the cash costs for mining would be ~$650-700 per ounce. If we were to construct a 10,000 tpd mill, the capex on that would be ~$275mm. Annual production of 90,000 ounces of gold, would generate revenues after cash costs of $76.5mm per annum based on $1,500 gold. Suspect that my long term price for gold is conservative, but I think there is probably a mineable deposit at Coldstream.
Reality is, that we have a .12 bid. They say the market never lies.... Is that so?
Comment by
michael211 on Aug 13, 2011 12:13am
In Feb. their nr said the 403-101 would be coming out in May, in May, we heard it would be out in June, in June we heard it would be out in Aug, now it seems to be out in Sep.In July the IR guy said the share price dropped because most fund managers are in vacation in July, in Aug they may say the share price drops because the USA credit downgrade.why not just tell a truth ?