Revised Numbers...
Assumptions
1. The property we are discussing is the Patent Claim #5797 located in Box Elder County, Utah.
2. 80% of the available gold can be recovered.
3. Production costs of $250/oz (including any environmental set aside).
4. A standard gold producer forward EPS multiple of 5.0-8.0.
Data Assumptions
1,277,950 ounces of gold @ $650/oz. equals $830,667,500.
(Gold Spot $664.83 at this writing)
Recoverable amount = 80%
1,277,950 x .80 = 1,022,360 oz
Total valuation
1,022,360 x $650 = $664,534,000.00
Production cost
(1,277,950 x .8) x $250 = $255,590,000.00
Net revenue in ground
$628,751,400.00 - $255,590,000.00 = $408,944,000.00
EPS
$408,944,000.00 / 250,000,000 shares = $1.64
This assumes worst case share issuance.
Gold multiple forward EPS valuation
Low: $1.64 x 5.0 = $8.20 per share
High: $1.64 x 8.0 = $13.12 per share
Current price valuation multiple range
Low: $8.20 / $0.08 = 102.5 times current price
High: $13.12 / $0.08 = 164 times current price
Estimates:
Expect large speculators to arbitrage the EPS estimate based upon the assumption that the gold production area of PHGI will be purchased by larger gold interests as the current Gold Bull expands.
This is an updated post from earlier estimates reflecting recent gold prices and share structure.
rrm
► Any comment provided is my personal assessment/opinion of the indicated stock. "When the gods wish to punish you, they grant your wishes. Therefore be careful of what you wish for."
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