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Gold closed the week at just over $1571/oz today. GLA

$1500oz is enough to justfy a valuation of £1.5bn for POG imo.

Just touched $1571oz.

Gold prices seem to be consolidated above $1550.

Afte a bit more research it seems the purchase is not significant. The chairman's wealth is probably more tham £300m, so this purchase is only a small change for him imo.

The chairman purchased 1,400,000 shares this week.

"Regarded as the future of gold industry in Russia, the Pressure Oxidation facility (‘POX Hub’) is one of the most technologically advanced processing plants of its kind, as well as being Petropavlovsk’s newest and most important asset.

Pressure oxidation technology is the most efficient and environmentally-friendly technology for processing refractory gold ore and enables the Group to unlock the value embedded within c.5.31Moz of its own refractory reserves (including double-refractory ore), as well as treat 3rd party refractory material and future potential to exploit high-quality refractory orebodies across Russia and further afield."

POG is likely to be producing 1000koz of gold in 2021 and generating 1.5 billion in revenue, with gold price of $1500/oz.

It's likely to rise higher if gold stays at around current levels.

Petropavlovsk strikes gold as sales soar in final quarter.

https://www.cityam.com/petropavlovsk-strikes-gold-as-sales-soar-in-final-quarter/

It's likely to rise faster than we think imo.

From another site.

"Good IRC results released today as well. POG has a 31% holding in IRC.
IRC is now at the point of making a profit for the first time.
POG says it wants to sell it's stake in IRC and return to being a gold only company.
There are a number of parties said to be interested in buying POG's stake.
The POG share price assumes nil value for IRC.

What would a buyer pay to get 31% of IRC from POG?
$50 million?
$100 million?"

With gold prices at current levels, we could see a massive jump in profits for 2020.

All sustaining Fixed costs have been decreasing and are likely to be less than a $1000/oz, with cash costs even lower than than that according to the last report.
With gold prices at $1550/oz, POG should do very well imo.

"Gold production is expected to range from 620koz to 720koz, including third-party concentrate processin"

With gold prices at $1550/oz, POG is likey to go much higher imo.

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/POG/14394747.html

Gold hedging

" All outstanding gold hedging contracts matured as at 31 December 2019, and the Company is now unhedged and exposed to spot gold prices"

2020 Outlook

"Gold production is expected to range from 620koz to 720koz, including third-party concentrate processin"

I would be happy with 500Koz or more FY 2020 gold production guidance.

POG had to sell their gold at much lower prices due to the hedges.
Gold price $1550/oz, production likely to be over 500,000oz in 2020, and likely cost of production is going to be lower too.
$200m profit is a conservative estimate imo.