Post by
TheRock07 on Mar 24, 2011 12:05pm
Great Value
I owned this one earlier and waited until it had consolidated, which it now appears to have done.
HRG will produce about 325,000 oz of gold this year at a cash cost below $600 per oz.
Thats about $275 million in cash flows or about
.29 per share.
Which means that HRG is trading at less than 4 times annual cash flows while its peers trade above 10 times annual cash flows.
It has a great balance sheet with oodles of cash.
In other words, HRG should be valued above $2.50 per share on its low cost gold production.
But, perhaps its greatest asset is the Prognoz high grade silver deposit.
Prognoz has 200 million oz of perhaps the highest grade silver in the world.........nearly 30 oz per ton which means each ton of ore will be worth over $1000 .
Silver is predicted to move upwards to $50 per oz over the next several years which will trigger the development or sale of Prognoz.
AUM's 51 million oz are wotth $8 per oz of market cap in the ground and those grades are less than 1/2 of Prognoz.
That is, HRG's 50 % interest in Prognoz is worth more than the current market cap.
Anyway you look at it, HRG will give great profits over the next year.
Value always emerges and it will here too.................
Comment by
bart_dc on Mar 24, 2011 12:25pm
Totally agree with your assessment TheRock.HRG's share in Prognoz is worth more than half a billion at least and here we're trading at 800 million dollar valuationwhile producing 325K ounces of gold each year...Valuation is dirt cheap but it's the momentum that is against us.Things can change very rapidly though.Hang in there guys!