Key Metrics For Valuing Producing Miners...
I'm hoping to start a new spreadsheet intended to cover producing (and soon to be producing) miners and I'm thinking about what needs to be in the spreadsheet. I would like one spreadsheet to cover all kinds of miners (gold, silver, copper, moly, ...). Don't think I want to cover iron ore or coal.
I expect I'll have more than 100 companies in the spreadsheet eventually, so this is a job that's going to take a lot of hours of work. This means I'd like to start it right.
With this spreadsheet I would like to be able to compare:
o Compare different individual companies (finding the most "undervalued" gold producers, for example).
o Different industries (copper, zinc, gold, silver) in terms of mining typical profitability.
With the inputs that follow, I'm hoping to be able to calculate (trailing and going forward 2 years):
o Price / Operating Income - where operating income includes all of the costs not associated with growing production.
o Price / Recoverable $ Of Metal In Ground
o Price / Recoverable Oz/Lb Of Metal In Ground
o Mine Life w/out exploration
o Operating Income / Debt
Am I missing any key metrics that I should be looking at? What should I be looking at for financial strength.
I'd really appreciate any thoughts you might have on how I should get started on the right track.
MontyHigh, www.worldofwallstreet.us
Here's some more detail (in terms of basic categories) of the inputs I'm hoping to assemble:
RESOURCES: I'm thinking:
o Ore Grades (Proven/Probable, M&I and I)
o Recovery Rates
o Estimated Metal Prices
are inputs for which a key metric of dollar value of a tonne of ore is produced.
Number of tonnes of ore.
PRODUCTION: (actuals last 4 quarters, estimated next 8 quarters).
Tonnes mined
Revenue per tonne mined.
Production cost (operating cost) per tonne of ore (including as much as possible without depreciation or amortization or initial capital expenditures).
Metal prices when sold.
Hedges/Royalties/Taxes per tonne mined.
Royalties per tonne mined.
The above can be used to calculate the profit margin per tonne.
Number of tonnes.
FINANCIAL:
Market Cap
Fully Diluted Shares
Debt
POLITICAL RISK: Country of location, notes on local problems.
ESTIMATED METAL PRICES: (by quarter, actual
STORY: 1 paragraph explaining what is likeable (or unlikeable) about the company.
