FairPoint Communications FRP

Thoughts from the goldbug317

[Goldbug317]

This is napkin math. Cash cost per ounce at perama is about 170 bucks (I think the first couple years is around 135) producing 100k ounces a year at a 300 dollar profit per ounce = 30,000,000. Of course we will owe 100 million to the bank (we may do some equity financing as well,or maybe not).Either way,the project is so robust we will extinguish the debt rapidy. Assuming we DONT dilute anymore u can divide 30 million cashflow by 170 million shares outstanding and get about .16 cents a share in earnings.We should trade for 10 times earnings(at least), which would be about 1.60.....remember this project probably has a mine life twice as long when taking into acount the sulphide material below the oxide cap. We paid 12 million for the deposit.Id bet,if we were sellers we could fetch over 20 million for it now.That would give us about 35 million in cash.We have a market cap of 50 million.Anyhow,this is completly irrelevent but an interesting thought when evaluating the VALUE of this deal. I believe Macuasani is a success story in the making as well.This 20k M drill program will give us,and the market a good idea of what the resource potential could be. Will be an interesting year for FRP! goodluck goldbug317

[matthew77]

I agree with you wholeheartedly, on both the math and the IR situation. My numbers on the math were slightly more conservative in terms of earnings per share, but the bottom line is that Perama Hill is a low cost money maker that will deliver nice earnings to this company. I'm very bullish on the uranium project. Dixie Creek is a crapshoot, could go one way or the other. I guess we'

[ureka]

Goldbug don't forget interest costs, admin costs, depreciation costs, drilling costs and lump sum payments. I think Peter told me the project would be 60% debt and 40% equity.

[Goldbug317]

Ureka Yes, of course, lots of other costs will be incurred.We will also have about 25 million cash after after the warrants are excersised.I expect this will happen upon receipt of the permits.I also believe my number of 30 million in annual cashflow may be a bit conservative.Anyhow,we should be well north of a dollar on perama alone.There is more exploration potential on this concession.WE get

[thasis]

Valid point Ureka but, Goldbug was using a value of only $470 per oz. Gold is at $600+ last time I checked and is due for a break out here soon. Never the less staying on the conservative side using $600 per oz. gives us $430 not $300 as bug indicated .Minus of course costs as was mentioned. Thats $130 X $1.2 mil = an extra $156 mil.That is an extra dollar per share. Once permits in place