New World Gold Corporation (NWGC)

[Computerbux]

NWGC Valuation DD (with links)


These values are based on current DD – Any change in values via PR will change this valuation.

From the previous financial statement, we know that NWGC has $11.7M in assets, including accounts payable, equipment, leased mines, inventory, etc.

We know that they had revenues of $2,488,516 for Q1 2014 and after costs, the net PROFIT was $750,000 for the quarter.

We can annualize the amounts into $9,954,000 in revenues per YEAR and about $3,000,000 NET PROFITS per year.

Revenues also grew Q1 2013 to Q1 2014 by an astounding 98%!!!!!!!!!

The most recent O/S directly from the transfer agent is 621M shares. That’s an EPS of $.004 per share!

We also know that they currently mill for 7 mines, to be increased to 12 mines in August (or almost double the production)

http://www.otcmarkets.com/stock/NWGC/news/New-World-Gold-Increases-the-Number-of-Independent-Miners-That-It-Processes-Ore-for?id=82364&b=y

http://www.otcmarkets.com/stock/NWGC/news/New-World-Gold-Corporation-Shows-Increased-Revenues-and-Profits-in-the-First-Quarter-of-2014?id=79614&b=y

http://www.otcmarkets.com/financialReportViewer?symbol=NWGC&id=120877

Currently, we know from PR’s and directly from the company website that the company has 695,000 in PROVEN reserves and 1,200,000 in probable reserves. For the sake of this DD, we will use PROVEN only.

We also know that as of August 15, 2014, the company is opening mill in Ecuador estimated to produce around $2M NET PROFITS per year in addition to the existing mines and milling operations.

http://www.otcmarkets.com/stock/NWGC/news/New-World-Gold-Corporation-to-Open-Additional-Mill-in-Ecuador?id=82184&b=y

The most current gold price, as of 6/30/14 is $1316 per oz.

http://goldprice.org/

The average P/E ratio of mining companies is around 20.

The average cost to mine an ounce of gold is $1200 per oz.

Thank goodness NWGC is mostly involved with milling! But they do still have their own mine as well.

http://www.ibtimes.com/gold-prices-below-1200-could-mean-production-cutbacks-world-gold-council-1553008

So what we have here is 695,000oz of proven gold, and if you multiply that by today’s gold price, you get

695,000 x $1315 = $913,925,000 Dollars of Proven Gold

Take the same $695,000oz and multiply that by the $1200 per oz average cost

695,000 x $1200 = $834,000,000 in cost to mine the gold

Now we take the revenues and subtract the costs:

$913,925,000 - $834,000,000 = $79,925,000

Now let’s take a look at what all this means for valuation.

We can do an [b]ULTRA conservative valuation, and not include ANY of the assets; this, of course, would be foolish, but just for argument’s sake, let’s see what it brings us.

$5,000,000 NET PROFIT / 621,000,000 shares O/S = $.008 per share. $.008 x P/E ratio of 20 = $.16 per share ULTRA CONSERVATIVE. (this does not include gold reserves or assets, only profits)

Now we can do the full liberal valuation, which means we expect the FULL INDUSTRY STANDARD of 80% of the gold oz to be recovered.

695,000 x 80% = 556,000 x $1316 per oz price = $731,696,000
695,000 x 80% = 556,000 x $1200 per oz cost = $667,200,000

Net Recoverable Value of Gold = $64,496,000
Listed Assets of $11,700,000
Annual Net Profits from Milling: $5,000,000
Total Assets plus profits = $81,196,000 / 621,000,000 shares O/S = $.13 x P/E ratio of 20 = $2.60 per share!!!!!!!!!!!!!!

Now for the market’s sake, let’s not take the ultra conservative nor the ultra liberal, but right down the middle of the road. That is $1.38 per share!!!!!!!!!!!

Any way you cut it, slice, it, or view it, $NWGC is severely undervalued! They are growing, producing, and have profits Q over Q. They have assets and reserves. They are expanding. This is a GREAT STOCK to have in your portfolio. I expect huge gains from this point forward.

Lastly, there are rumors of ADDITIONAL net profits, maybe dividends, and a new website all coming soon. So stay tuned!
All the Best,
Computerbux