Wheels Group Inc GRFJF

It's Getting Better

[SkyeCairns]

I admit it's getting better
A little better all the time
It can't get no worse
Yes I admit it's getting better

As the company was conservative on its costs it forecast 1st quarter costs "exceeding 1,000 per oz" back in early March so lets assume its forecasts are not too far off the mark for the 2nd quarter or at least it has NOT overestimated the net profit.  Based on the spot price so far this quarter (2nd), cost of goods sold of 456-435 ,oz sold of 41,000-45,000 and lets assume no P&L impact on the MTM of the gold forward contracts I come up with the following eps for the 2nd quarter:

Best Case : 0.12 eps
Worst Case:  0.10 eps

The hedges don't come into play until 3rd quarter and I have assumed the cost/production is the same in each of the remaining quarters.  The closing spot for March 31, 2008 from Kitco.com was 933 per oz so it the price as at June 30, 2008 is less than 933 which it probabably will be then these eps' are undervalued as a POG of less than 933 will have a positive impact on the P&L relating to the revaluation of the gold contracts.

If the actual eps is anything close to the above then I see "hot fun in the summertime"

GLTA

[shortUSA2]

Cost of goods sold does not include the full cost of running the company, it is an expression of production cost .   Your numbers refer to cash flow per share.   Hard to say what their real break even cost is until they get up to full production.   Should be able to turn a profit easily but we'll see in a few months.  EPS will likely suffer for some time as

[SkyeCairns]

re: Cost of goods sold does not include the full cost of running the company, it is an expression of production cost .   Your numbers refer to cash flow per share.   Actually I took all their expenses/revenuses from their Income statement changing the numbers for their forecast on oz to be sold, selling price based on Kitco spot prices.  I did not taking any numbers for