SRGE going to run after all the shorts having to catch with 2 days market being closed
SRGE being extremely under valued based on their filings and 4th quarter still come. Folling is based on the 3rd quarter filings.
"SRGE VALUATIONS ARE ASSUMPTIONS AND FAIRLY ACCURATE!
That is exactly the problem with negating 24/7 because one fails to see that these are valuations based on assumptions, projections, historical values, industry metrics and etc.
Contrary to your view, the valuation for La Canita DOES INDEED assume less than 100% recovery as the cost basis used is 76%. If this asset were 100% divested to a major this year, 185,000 oz of gold can be monetized in one year. So the conservative math here is actually:
($1650 x 185,000 oz)-($620 x 185,000)/545874868=.349 EPS
0.349 x 21.20 P/E = $7.40
The figure $620 reflects cost per gold equivalent oz which due to the current price of gold still yields a GP much higher than figure, so if we are using a GP of 24%, it is no different than reducing revenues or recovery rate below 100%! Hence the statement in re of the current market value being $320MM IS NOT AT ALL QUESTIONABLE because if gold reaches $3,000 per oz next year, the valuation only moves in the same direction not the reverse making the $7,40 pps a bargain, wouldn't it?
IF we were to apply a 10 year life to the mine and evenly distributed 185,000 oz, then we would see a slightly diminishing EPS/PE value over time because the price of gold for NPV calculation purposes is fixed at $1250 per oz after 2015 while the cost basis remains fixed!
I will also take this opportunity to address a question you had regarding the strip ratio of Cinco Minas from the Tumi Report 2002/2004. If you can follow the fixed costs per gold equivalent oz, and consider the price of gold per oz in 2002-2004, does it make good business sense for anyone to work Cinco Minas then? This is not a difficult consideration.
IF SRGE were to not divest the CMM but actually worked on the known 20% over the next ten years, the expected P/E from 2013 to 2022 would looks something like the following based on O/S being fixed at 545MM and costs also fixed at $620 gold equivalent ounce:
$0,94
$0,94
$0,71
$0,57
$0,57
$0,57
$0,57
$0,57
$0,57
$0,57
The above can be achieved with a 500 tpd capacity! "
AI
