RE: 500% possible11 Jun 2020 18:32
marketanalyst111 Jun '20 - 17:27 - 4244 of 4244
Private investors would be wise to note the following about Goldstone Resources:
• Formally awarded a 10yr mining lease on the Akrokeri and Homase Licences on the 14 February 2020 by the Government of Ghana. Both licences are situated in the Ashanti Gold Belt, Ghana.
• The asset boasts a gold recovery rate of 87.5% and an IRR of 143% (at a gold price of US$1,300).
• The asset boasted a Net Present Value of £14.9m (at a gold price of US$1,300 per ounce) on September 2019. However, at the current gold price of $1,700, the asset boasts an NPV of £19.37m.
• The company raised £3.4 million on 16 March 2020 from sophisticated investors to finance the advancement of its Akrokeri-Homase Gold Project (AHGP) into production.
• The company withdrew £235,000 from its £2.35m Asian Investment Management Services gold loan. Drawdown period extended to June 30, 2020 should they need the remaining £2.1m.
• Heavy weight gold investors Paracale Gold and BCM Investments took part in the bond issue.
• The company confirmed, on 30 April 2020, that it was on track for gold production in H2 2020 at its AHGP asset.
So, with a current market cap of £11.75m (4.7pence per share), and less cash of £3.5m, means the market is valuing the company’s Akrokeri-Homase Gold asset at a paltry £8.25m. Compare this to the asset’s current value of £19.37m.
Thus, a base valuation of 12pence per share (or a £29.3m market cap), that factors-in the current NPV of AHGP alongside the company’s cash balances seems eminently sensible.
But here’s the real kicker;
Valuing the company on a DCF (Discounted Cash Flow) model throws up significantly higher values, especially considering that the company is only a couple of months away from production; implying an extraordinary upside on the stock, and underpinned by a waning global economy that is accelerating the unfettered printing of fiat currency, and which will gradually lead to a $2,000-plus gold price.
Thus, take cue from the shrewd money taking LONG positions in the stock today.
Https://www.ft.com/content/ecd9c6d5-6c42-4aa2-ae00-b741efd5af67
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