it is true that you were using after tax profits and i was using pre-tax profits. however i think that you are misequating % profit with market cap as a multiple of earnings (pe ratio). i used your number until i thought this thru more completely.
most business typically sell for 15x earnings to give a pe of 15. at the end of bear markets the pe's go to about, say, 7x-10x, and during bull markets, 20x-30x. your use of 5-7 times profits is probably % profit as the inverse of pe's 15x is 6.67% - that is to say a company selling for 15 times its profit has a profitability of 6.67%.
therefore the target price of AGI is about twice what i stated in my previous post - if it is correct to use pre-tax profits. if it is correct to use after tax profits for calculating then a realistic target price is twice what you stated in your post. you figured a fair price of between 1.72 and 2.67. accepting all your other assumptions (55 million shares out, capex) the realistic target price is therefore 3.44 to 5.34.
however listening to the webcast by mccluskey, he clearly stated that the pilot plant would pay for development of the rest of the production - and that they expected another pp later this spring. how many shares? who knows! they also have said that they expect better recoveries than the PDG 66% - thus lowering their cash cost and increasing their profitability. your assumption of a mistake being made by building the pilot plant instead of the complete facility presumes that one precludes the other. given chester millar and his team's experience - as good as there is out there in heap leaching - im going to put my money on chester millar's judgement and experience.
longjonsilver
