cash flow will rule
dynacor is averaging about 16% profit margin over the last ten years. their projections of 45,000 oz in 2011 at roughly $1500 gold would give $67.5 million in revenue. In 2012 the company would like to add another mill of approximately 300 tpd to their portfolio. if they can execute this expansion, production could essentially ramp up to over 500 tpd in 2012. think about it... 500 tpd would produce about 125,000 ounces at a head grade of .77 oz/t. if gold averages $2000/oz in 2012, dynacor's revenues at 500 tpd would be $250 million.
$250 million in revenue at the avergage of 16% equates to $40 million. considering in the last two reporting years the company improved its profit margin to 19%, one could believe profits of $50 million and more is in the cards.
$50m divided into $35 million o/s is $1.43 profit per share.
analyst nicholas campbell from canaccord recently mentioned 2012e cash flow per share in junior producers is averaging 9.5 times. i expect 9.5 times to be blown out of the water as we move closer to the end of the year. in fact i would venture to predict we will see at least 20 times cash flow per share for the junior producers before the year is over.
hearing news is imminent from production and exploration. when the drills start up again it could get ineteresting... and think of the reaction if they announce a new cross cut campaign is in the works...
let's see: 500 tpd from gold production, drills turning at tumipampa and a new underground mine development plan... nice for a company with 35 million shares out.
i think dng will awaken from its summer time hibernation without warning.
long and strong
