Afternoon all, I've been doing a little digging into valuation of gold miners and while it seems to be rather subjective I.e what applies to one company by no means applies to another, there are some ball park numbers which we may be able to consider...
Nb. Not normally one to take note of the fool but an interesting article nevertheless..
"Kinross has an EV of six times EBITDA, which is low for a gold miner. It is significantly lower than many of its peers, with the exception of Barrick Gold (TSX: ABX)(NYSE: ABX), which has an EV of five times EBITDA. Kinross’s EV to EBITDA is lower than Newmont Mining’s (NYSE: NEM) EV of 10 times EBITDA, Yamana Gold’s (TSX: YRI)(NYSE: AUY) 12 times EBITDA, and Goldcorp’s (TSX: G)(NYSE: GG) nine times EBITDA."
The Manica project currently gives a total "EBITDA of US$245 million (assuming LOM of 12 years)"
To run some rough calcs we could say it'll provide roughly an EBITDA of $20mil annually. Looking at the valuation methods provided in the article above we can conservatively say the Manica project (once in production) could be worth anywhere from $100mil addition to market cap to a far more speculative $250mil. [sp equating to between 1pps-2.5pps BUT would need to be adjusted for any dilution as a result of financing]
These are very, VERY basic numbers but this potential at Manica, Chepica having been turned around and any LoM extension or resource upgrades to either project essentially translates into a massive amount of upside here. Just wanted to get down on paper why some of us here see 1p as "easily attainable".
Snooty- had another listen through our previous webcast a few days ago. What a reminder!
Nothing much to add to your summary, I feel our various projects have so far been very much underplayed to the market. Granted we've had a few issues over the past 6 months but we're over the hill and on to greener pastures (imo).
The numbers for the various projects are quite frankly astounding.. If we can hit anywhere near the $30mil profit suggested then our little group of long termers may indeed be laughing all the way to the bank!
Look forward to actually making it to one of the London meetings before long, circumstances have not been permitting so far... Speaking of which, did anyone attend the investor show yesterday?
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