Pacific Gold Corp fka PCFG

[stervc]

To Answer that PCFG Question in Valuation Format...

I think there are a few things that have to be considered. Let's see... They have a completed a NI 43-101 on their Black Rock Canyon Mine property located in Crescent Valley, Nevada. This property has been confirmed to have an estimated 500,000 ounces of gold:
http://www.pacificgoldcorp.com/properties.html
So, for now, let's just talk about this one property and not their other two properties that we know of.

Courtesy of taraniterror from the post below, I think it is a very solid chance that PCFG will capture the 500,000 ounces of estimated gold (or more) from The Black Rock Canyon Mine:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=55087880
The Black Rock Canyon Mine is located approximately 50 miles south-west of Elko, Nevada in the town of Crescent Valley; 22 miles off highway 80. Newmont Mining (NEM) trades on the NYSE at $63.00+ per share under the ticker of NEM. Newmont Mining is one of the World's largest Gold Producers and is located in Elko, Nevada not far at all from the PCFG Black Rock Canyon Mine property. Newmont has been pouring gold in Nevada for nearly 50 years along a 100-mile stretch of highway 80 in the north section of the state. If I had to guess, PCFG is in the right place at the right time as there is a huge change that they also have plenty of gold too.

Hold on though before we begin to get to the valuation part. On one side of the PCFG Black Rock Canyon Mine property is Newmont as mentioned above, but on the other side is the Cortez Mine which is 100% owned by Barrick Gold which is right there located in the same Crescent Valley, Nevada location as out little PCFG Black Rock Canyon Mine property. Barrick Gold trades at over $47.00+ per share and a little more could be read below for understanding the magnitude of this awesome location:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=55089366
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=55089023

So, in short, the PCFG Black Rock Canyon Mine property is between Newmont Mining and the Cortez Mine (Barrick Gold):
http://www.newmont.com/
http://www.infomine.com/minesite/minesite.asp?site=cortez
http://www.barrick.com/

In my opinion, there shouldn’t be many questions as to whether or not they have gold, but that’s just me. The beauty about their Black Rock Canyon Mine property is that it is within gold-bearing alluvial gravels. This means that you won't have the huge Net Expenses/Costs to mine as you would with hard-rock mining of the norm. So paying for huge drill programs, certain types of labor, etc. will not be required. That means more Profit for the company. For the purpose of this post, when I say Profit, I am referring to Net Profit or Net Income as Profit basically is synonymous with Income.

Now let's consider gold being above $1,300 an ounce as confirmed below by Kitco:
http://www.kitco.com/charts/livegold.html

500,000 ounces x $1,300 per ounce = $650,000,000 in Potential Revenues

Out of that $650,000,000 for Revenues, let’s give this operation a 25% Net Profit margin. This means that PCFG will have Net Expenses of 75% of the $650,000,000 (that equates to $487,500,000 in Net Expenses) to maximize generating a Net Profit of…

.25 x $650,000,000 = Net Profit
$162,500,000 = Net Profit

I confirmed from the company as other investors have confirmed from the Transfer Agent (TA) that the PCFG Outstanding Shares (OS) is 719,510,429 shares of which about half of that makes up the Float. The Float is always nice to know, but the OS is important because it is used as the denominator to assess fundamental valuation for determining an Earnings Per Share (EPS). Also confirmed from the company, there were 322,728 preferred shares at a 1 to 1,000 conversion ratio that converted to 322,728,000 shares that has already been converted and have been already added to the OS as part of the 719,510,429 shares. So that fear of them being converted should be gone.

So, now that we have a ”speculative” figure for Net Profit and a confirmed OS, we can now derive an EPS. The EPS is derived by taking the Net Profit/Income and dividing it by the OS. Observe below as the Net Profit amount is the numerator and the OS is the denominator…

$162,500,000 ÷ 719,510,429 (OS) = EPS
.225 = EPS

Now to determine where PCFG could potentially trade, you must multiply the EPS by a Price to Earnings Ratio or what is known as a P/E Ratio. I will use a conservative P/E Ratio of 12 although for the Industry and Sector of which PCFG would trade under within the Basic Metals Sector, it could be justified to fundamentally use a higher number, but I will use 12 as indicated below…

12 P/E Ratio x .225 EPS = $2.70 per share “potential” valuation

Is the above info reason for you to go buy PCFG as soon as possible? Maybe, but maybe not; so what does this mean? Understand that this valuation is if the total amount of estimated 500,000 ounces of gold is captured from their Black Rock Canyon Mine. This could be over a short period of time depending on how operations would be accelerated or over the life span of the property being mined. We don’t know, but again, I like our odds. Why? Because of where the property is located. Again, the property is located in the same areas of Newmont Mining and the Cortez Mine which is 100% owned by Barrick Gold. Again, I like our chances.

So back to answering the original question about PCFG issuing a cash dividend; as you can see, if everything comes even close to what I have explained above, then PCFG would have plenty of room to issue a cash dividend.

But wait, the thoughts above just might still be a little extreme to believe for some. I understand as I am not usually conservative in my posts to some no matter how hard I try to be. So let’s go one more step further those who are extremely conservative and use the marvelous thoughts shared by foxwoodsfan within his post below from the info within the PR below from the confirmed production rates:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=55079953
http://ih.advfn.com/p.php?pid=nmona&article=44625531&symbol=NO^PCFG

** PCFG can is saying that they can process 9,000 tone in a quarter month (1 week)
** That's roughly 6,350 cubic yards x 4 is 25,400 cubic yards a month full production at call it .04 oz per cubic yard to be conservative and stay in line with estimates.
** That's 1,016 oz a month at let's say $1,250 per oz.
** That’s $1,270,000 a month.
** If they can stay close to their estimated reclamation costs at $425 an oz that's $431,800 in costs.
** That's $838,200 in NET PROFIT per month.
** That’s an annual amount of $10,058,400
** The $425 an oz reclamation cost is a good number as they should easily be able to subcontract the excavation and hauling at $5-$6 per cubic yard, another $4-$5 a cubic yard to process it through the mill, recover and transport to the smelter and the other soft costs.......this is looking really good!

Now to derive a more conservative EPS, consider the variables from above…

OS = 719,510,429 shares
Annual Net Profit = $10,058,400

$10,058,400 ÷ 719,510,429 (OS) = EPS
0.0139 = EPS

Again, let’s use a conservative P/E Ratio of 12 and we now have below…

12 x .0139 = .1668 per share

This price of .1668 is where PCFG could conservatively and logically and fundamentally trade. Again, keep in mind that this is just from one of their 3 properties. This is also based on the potential that exists that was explained above. Keep in mind too that ”potential” is the #1 reason why we all look to invest into any stock. I have to say this again that the ”potential” here with PCFG is huge!

v/r
Sterling