I had just finished putting together a pps model based on oz of gold mined (15k), proceeds per oz($1530), cost per oz($650), estimating g&A for a a year at $4.3M and 600M shares o/s. Using industry avgs for p/e ratios of 21 (per yahoo) and price to sales ratios of 18 (also per yahoo)....i get a pps based on p/e of .312 and a pps of .689 based on price to sales.
The above does NOT consider silver in the model at all, but was just thinking that the silver we get would as you said, cover the costs of mining the gold....
In my model with the above facts, but getting 25k oz a year out, the pps range goes to .62- 1.15.
Again, the p/e ratio and p/s ratio used were based on industry avg's and actual ones for DGRI could be much higher (like double) and still be in the range of others in the industry based on my research.
We also have an income tax benefit which has been fully allowed for of roughly $8M...once it is clear that we can obtain profitable ops, the company would be able to recognize this as an assets as well...a snowball effect of income if you will....also in this regard, it means the company can earn about $23M of net taxable income before ever paying any income taxes.
WE ARE ONLY 4-6 MONTHS AWAY FROM THIS SCENARIO ACTUALLY HAPPENING...ONCE IT IS CLEAR ON THE START DATE AND WE GET ANY INDICATION OF EXPECTED GOLD OZ'S A YEAR, THE PRICE WILL/SHOULD JUMP TO THESE LEVELS AND ABOVE.
MY MODEL DOES NOT ACCOUNT FOR ANY OTHER PROJECTS YET TO BE NAMED OR JUNGO NOR DOES IT INCLUDE ANYTHING FOR SHMX SHARES OWNED.
KABOOM!!!!!
Hit the ask early and often!
TRAZ
