Below is a valuation that I have derived that should help investors to gage where SAEI really ”COULD” fundamentally trade in the dollars if the stars continue to align. Before viewing the share price derived for where SAEI could fundamentally trade at within the dollars, please understand some key info below to fully understand how such price was derived. I say in the title “Pending NI 43-101 Confirmation” because of the NI 43-101 that was PR-ed to be completed ”by” December 5, 2010. The word ”by” means that it could quite possibly come before 5 Dec 2010 too. To better understand the significance of what the NI 43-101 would do and mean for SAEI, please read the post below: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=56998450
http://www.supatcharesources.com/barlevskoye.htm The licenses are adjacent to the Berehiskyi license-deposit, which recently underwent underground mining for gold from 1999 to 2006 by Zakarpolymetally (a local subsidiary of the local government). The Berehiskyi License hosts a historic, near-surface polymetallic deposit, which is reported to contain approximately 18,709,300 t of 1.88 g/t Au; 38.35 g/t Ag; 2.07% Pb and 4.76% Zn.
As you can see from the map below along with the info above about the Berehiskyi license-deposit, if the Berehiskyi license-deposit was reported to contain approximately 18,709,300 tons, then the Barlevskoye and Vynohradiv license-deposits should contain at least 7 times more tons just by taking a visual of the size and comparing them to the Berehiskyi license-deposit: http://investorshub.advfn.com/uimage/uploads/2010/11/2/l%5BxtvRegional_Geology_Barlevskoye_&_Vynohradiv.jpg
However, for the purpose of this valuation post, I will remain conservative and consider the Barlevskoye and Vynohradiv license-deposits to contain 18,709,300 tons since that’s what’s on file for the Berehiskyi license-deposit. Again though, as you can see, I could have easily used multiple times the amount of 18,709,300 tons.
Historic drill results at Barlevskoye and Vynohradiv included 3.6 grams per tons of gold ("g/t Au"). As from what we know thus far about the SAEI Phase I drill program, out of a certain 9 holes, the lowest grams per tons indicated was 11.88 g/t and the highest was 32.64 g/t with an average of 20.89 g/t for the 9 holes. From the SAEI Phase II drill program, out of a certain 8 holes, the lowest grams per tons indicated was 15.22 g/t and the highest was 33.23 g/t with an average of 28.62 g/t for the 8 holes.
So from what we know to consider as a minimum and conservative amount of tons, we will consider that historical amount of 3.6 g/t to derive below for the amount of grams coming from a minimum deposit amount of 18,709,300 tons and not the 20.89 g/t for the average of the 8 holes to remain conservative…
Keep in mind, that once SAEI gets their expected NI 43-101 Technical Report completed, then this valuation should be considered ”proven” and not ”potential” for SAEI for the reasons I explained below concerning the importance of having a completed and filed NI 43-101: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=56998450
For now we can derive a yet still conservative ”potential” valuation for SAEI until the NI 43-101 gets completed and filed.
2,375,824 ounces of gold x $1300 per ounce = $3,088,571,200 worth of gold
The $3,088,571,200 worth of gold is still a very conservative number simply because remember that I only used the 18,709,300 amount of tons to derive this amount from the Berehiskyi license-deposit and not the 7 times larger SAEI Barlevskoye and Vynohradiv license-deposits of topic owned by SAEI. This means that technically we can multiply that conservative figure by 7 times the amount, but let’s still remain conservative as these conservative numbers will be hard to believe to some I am sure. I also remained conservative by using the 3.6 g/t and not the 20.89 g/t average for the 8 holes from the SAEI Phase II drill program that is still ongoing for 8 months which started back on 9 Sep 2010.
Although the $3,088,571,200 is considered the gold value or worth for SAEI, if it is captured as I have explained above, it would also be considered the Revenues for the company’s financials. In still being conservative, let’s presume that the company will have a 25% Net Profit Margin from generating these Revenues. This means that SAEI could have Net Income of the amount below:
$3,088,571,200 x .25 = $772,142,800 Net Income
Now to derive an Earnings Per Share (EPS), you have to use the following formula…
Net Income ÷ Outstanding Shares (OS) = EPS
Net Income = $772,142,800 OS = 61,000,000 OS
$772,142,800 Net Income ÷ 61,000,000 OS = $12.65 EPS
This is huge. Please, I have to ask that all go back to read how I derived this number thus far because we still have to multiply that $12.65 EPS with a Price to Earnings (P/E) Ratio to still get the share price for where SAEI should be trading. I will use 12 as a conservative P/E ratio. This means that the share price of SAEI ”could” fundamentally trade at the share price derived below…
12 P/E Ratio x $12.65 EPS = $151.80 per share value for SAEI
With this $151.80 share price, I think it’s fair to base this over a cumulative 7 year time frame as what the Berehiskyi license-deposit time frame was from 1999 to 2006 for when it underwent its mining program for gold that reported to contain approximately 18,709,300 tons of 1.88 g/t Au (gold). This means an annual basis would make more since to divide that $151.80 by 7 to have a more logical share price of $21.68 per share.
As I have mentioned within the post below, if the NI 43-101 Technical Report for Agnico-Eagle Mines Limited which trades on the NYSE under the ticker of AEM can trade at $77.00+ per share, then SAEI trading at $21.00+ per share is not out of the question considering the numbers that SAEI has from their Phase II drill program are far greater and superior numbers than the numbers listed within the AEM NI 43-101 Technical Report within the post below: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57132499
This is why investors await the upcoming filing of the SAEI NI 43-101.
Now, something very very important to take under consideration that I see that many shareholders are forgetting about is that the above valuation does not include the huge amounts of silver, lead, and zinc that will be proven from their NI 43-101 as like the gold within their area too. SAEI is about to release their NI 43-101 Technical Report and I am sure that it will not only show the valuation for gold, but for the amounts of silver, lead, and zinc too.
In closing, please understand, I have done valuations on many companies and it meant nothing for where the company ended up trading or existing… good or bad. It is going to not matter what I post as any valuation, but instead, it will matter what the company execute with their business objectives of growth to confirm the ”potential” I have posted to exist. If SAEI does nothing to prove to the market that they are completing their goals for growth as I have posted above, then who knows where SAEI will trade. However, if they execute their goals as so far they are very much on track for executing, then I expect SAEI to trade at or above that price value I mentioned above.
I have said this statement in other stocks, but I think it applies the most here with SAEI…
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