Zeev's Turnips Patch-No Politics (ZEEV)

[haystax]

From SI:

http://www.siliconinvestor.com/readmsg.aspx?msgid=21317026

From: Salt'n'Peppa 5/12/2005 10:46:12 AM
Read Replies (2) of 947

GPXM cash flow reworked - comments welcome.

The most current Moly price I have seen is $34/lb.

From the March 08 news release:
http://ca.us.biz.yahoo.com/prnews/050308/latu067a_1.html

2,125,000 lbs / 21,550 tons = 98.6 lbs/ton

Significant cash flow of $335,240/day from the 100 tpd pilot mill.

100 tons/day x 98.6 lbs/ton x $34/lb = $335,240/day cash flow
That is just over $10 million a month, just from the pilot plant.

This works out to $120 million/year in cash flow, assuming a 24/7 operation.

Let's be a bit more realistic.
Assume 18 hours/day production and a $24 net-back per lb.
(production costs of $10/lb is extremely high for this high-grade operation ($3 million/month costs?), but shows the potential of this deposit)
That gives us:

75 tons/day x 98.6 lbs/ton x $24/lb = $177,500/day earnings.

This equates to earnings of $5.33 million/month or $64 million/year.
GPXM's 60% share is $38.3 million/year.
That's 30.5c/share earnings (assuming no more dilution).

Most small cap miners trade at 10-15 times earnings, which would price GPXM at $3.05 - $4.58 per share.
...and that is a conservative estimate using very high production costs.

That would give us a 19-29 bagger from today.

Cheers,
S&P