posted
Last time, NDOL's news was out a week earlier than anticipated....
Anyways, with the recent surge in gold... I can't help but repost Weatherbill's post of the gold stocks comparison:
Interesting post from another forum "Some interesting Valuation Comparisons.....
I came across a survey on the web of 60 Gold Stocks, carried out Gold Stock Analysts (dated February 2006). These companies ranged in market cap from $50 million to $26 billion (Newmont).
An assessment was carried out find the relationship of Proven and Probable Gold Reserves (P/P)to Market Cap. Based on the gold price at that time of $562/oz, it was found that the average market cap for these gold companies could be calculated by multiplying the P/P gold reserves in Oz by $213.00.
i.e A company with P/P of 5 million Oz/ Gold should have a market cap of $1.065 billion, if fairly valued by the market, based on this average $/Oz figure of $213.00.
With the increase in Gold price to $650.00 this figure is now c. $245.00. This benchmark figure can be used to assess if a company is overvalued or undervalued in relation to the average price per Oz. Basically, it gives a simple guideline as to what the current market cap should be if 'fairly' priced by the market (all else being equal)
I looked for comaparable companies in the survey, with similar P/P reserves as AURC.
Agnico Eagle (AEM-NYSE) P/P= 7.9 m/ oz O/S= 106.7 million Current Price= $36.75 Market Cap = $3.92 billion Market Cap per Oz of P/P Reserves = $496.20/Oz (suggests gold reserves are over-valued when compared to the market average)
Eldorado (EGO-ASE) P/P = 7.09 m/oz O/S= 301.9 million Current Price= $5.24 Market Cap = $1.58 billion Market Cap per Oz of P/P Reserves = $222.85/Oz (suggests gold reserves are near to fair value when compared to the market average)
Randgold (GOLD- NASD) P/P = 6.58 m/oz O/S = 68 million Current Price= $ 24.24 Market Cap = $1.64 billion Market Cap per Oz of P/P Reserves = $249.24/Oz suggests gold reserves are near to fair value when compared to the market average)
Then carrying out the same exercise with AURC:
AURC P/P = 7.1 m/oz O/S = 113.4 million Current Price= $ 0.33 Market Cap = $37.4 million Market Cap per Oz of P/P Reserves = $5.27/Oz (No comment!!!)
Based on current Gold prices and an average of $245.00/ Oz of P/P reserves the market cap should be valued at:
Market Cap = $1.74 billion SHARE PRICE = &15.34
(Note: The above calculation does not take account of the silver and other reserves held by AURC)
Obviously, there other factors which need to be considered as well in such a valuation such as company financials, trading history, management, exchange etc. and I haven't gone into any DD of each of the above mentioned comparative examples to see if there are other factors that may affect their valuations.....but my conclusion based on this evidence is this must be one of, if not THE MOST, UNDERVALUED GOLD COMPANY out there....
-------------------- wbill
Sorry for being long winded... but I tend to be forgetful too...
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posted
There's some significant differences between those companies (I've made a fair bit on larger-cap mining stocks over the years, and know the business pretty well) and Aurus that make a huge difference in valuation...
For one, those mines produce, Aurus does not. And despite being in their vision statement, I haven't seen anything in regards to actually produce on the properties they have (admittedly, I haven't looked very hard). And even if they were to start today, it'd be 18-24+ months before the first ounce of gold was ready.
Aurus has a lot of gold. But it's not easy or cheap to get to. The reason Aurus can grab up these reserves so easily now is because the cost of gold is just passing the point where it's economically feasible to retrieve the gold on these holdings (and I question whether that's even true). No other companies wanted the sites; and for largely good reasons.
While vast, none of Aurus' properties appear to be very rich. Aurus' gold ranges from 0.05 to 0.3g/ton in on site to ~3.5g/ton on another. Successful mining companies will have FAR richer gold veins -- in the neighborhood of 6-10g/ton on average, and often even much higher. Aurus' veins are a tiny fraction of that. That means to get 1oz of gold, Aurus has to process more than 100 tons of ore; while many other successful mines would have to process only 6 tons of ore or even less.
Retrieval costs are huge in mining. They're the only figure that matters. Reserve figures mean nothing. That's why Agnico-Eagle's price seems "over-inflated" -- they get gold out of the ground for a quarter of what others do, which means massive profits. And Aurus' retrieval costs simply can't be good with the relative weakness of their gold veins.
In short, Aurus might have a lot more gold than some others, but they've got to spend a lot more to get it out of the ground than others do. And if gold ever corrects significantly their invested capital will be worthless because it will cost more to retrieve an oz of gold than it sells for.
All that said, I still own some Aurus. Will probably buy a little more. But I don't expect it to be valued anywhere near the above-mentioned companies.
Wow, that was awfully wordy for a post. Particularly my first one. Long-time lurker. Just wanted to post a slightly different POV.
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posted
Good post Sigma, I gave you a couple stars. I value you POV. But something worth mentioning is the gold correction. It seems gold for the longet time always corrected around the June July and August timeframe. That didn't really happen last year with everyone, many companies corrected but several did not, due to alot of factors. Normally the corrections start showing up in may, and I don't see that this year. One thing that seems to keep gold high is the U.S interest rate, which the fed is meeting on, and will most defanitly raise AGAIN. This will just give gold another boost. The U.S. is printing so much money right now, and getting into such a huge debt with the Chinese that gold is not to likely to correct much this year IMO. Which brings up the next point, if this pressure is maitained, less valuable fields will become much more valuable. It's kind of like the tar sands, not many were interested in them 15 years ago, but now you can't say tar sands together with another word without increasing it's value. Example (Sigma Tar Sands) if this was your name, you would make 10X more money on every trade.
-------------------- skids are for kids
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The reason gold prices are so high is because it is a good hedge against inflation. The rising interest rates are used to dampen inflationary pressures. Raising interest rates is not necessarily going to increase the value of gold. It will more likely do the opposite in the long run.
And sigma is right. It's very expensive to get to a finished product. I still however, think that whatever happens to NDOL will effect this more than any amount of gold they have (short term at least). If the NDOL deal falls through, AURC loses a lot of credibility, and we will see a hit to our PPS.
quote:Originally posted by Baxt06: The reason gold prices are so high is because it is a good hedge against inflation. The rising interest rates are used to dampen inflationary pressures. Raising interest rates is not necessarily going to increase the value of gold. It will more likely do the opposite in the long run.
And sigma is right. It's very expensive to get to a finished product. I still however, think that whatever happens to NDOL will effect this more than any amount of gold they have (short term at least). If the NDOL deal falls through, AURC loses a lot of credibility, and we will see a hit to our PPS.
glta
I disagree, it is the Inv. Bank Midland Baring that brought both. They are not tied in any way. You would be a fool to sell this long term.
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posted
They have the same phone number! Glen Parkins is the president of AURC and the VP of NDOL. Makarov is the president of NDOL and the VP of AURC. No connection???
I'm not saying sell, but I'm saying people are skeptical, and their will be a knee jerk reaction to any NDOL news (good or bad).
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Is everyone forgetting the real reason commodities are rising???? It's called Globalization, and the Big 4: Brazil, Russia, India, and China are a huge reason all commodities are soaring upward. I believe we still have a ways to go before we see any type of correction in these prices and I don't believe they will correct as much as some believe. It's called supply and demand, and the world is growing faster than ever before....just my POV, but this trend is far from over. GL
-------------------- Success is having the time and money to enjoy all of life's wonders...
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I guess NDOL got their news this morning. Merging with North-West. Seems like decent news, although I think many were hoping for the buyout.
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quote:Originally posted by Baxt06: They have the same phone number! Glen Parkins is the president of AURC and the VP of NDOL. Makarov is the president of NDOL and the VP of AURC. No connection???
I'm not saying sell, but I'm saying people are skeptical, and their will be a knee jerk reaction to any NDOL news (good or bad).
True, but he brought the price per share from .06-1.50. They know what they are doing. This stock goes higher longer term.
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posted
looks like ndol got about the same price per share from the merge as they have now. whats everyones thoughts on that and how its going to affect this stock
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posted
it's better for NDOL investors long-term, they will probably leave the pink shortly and that will also help their pps. AURC will do just fine now that the NDOL news is out. GL
-------------------- Success is having the time and money to enjoy all of life's wonders...
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I opened a new account with choicetrade last friday, can someone tell me when i'll b able to trade? sorry for being of the topic thanks
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No vol is because of NDOL, once everyone is done trading NDOL they will come to us. They may also put their profits in other small oil plays like PGPM. Either way AURC is going up
-------------------- Success is having the time and money to enjoy all of life's wonders...
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money...I think your math may be wrong...ndol owners get 41% of the 1.25 bill deal which equates to about $2.20 a share...that said I just picked up 10k of AURC
-------------------- The sharpest knife can’t carve its own handle
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A person from another board seems to have contacted the CEO... (Not sure of the validity, but sounded pretty good..) Do your own DD, of course.
""Today was my first time to ever attempt to call the company. Mr. Parkin actually answered the phone. Must be his cell phone. I did not bring up the subject of a buyout. He did. It was not my intention of asking him about any such possible buyout. After we got through talking about the transaction of the two properties mentioned in this morning's PR, he simply said, "with these new properties (referring to Klyon and today's PR'd properties), Aurus is ripe for a big company to offer to buy it out." I invite anyone at any time to verify any conversation's I've had with either this company or any other company for that matter""
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"RSM Top Audit http://top-audit.ru.mastertest.ru The evaluation of the gold properties is being done by RSM Top Audit. This is one of the top 6 global audit firms. This firm based in Russia, boasts an 'A' list clientele many Government publicly traded joint-stock companies, exceptional credibility and Sate/Government 'Classified' authorization."
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From another email contact in another forum. Do your DD please.
"Here's an e-mail from Gerald Parkin ......
I just received this afternoon. It was in response to an e-mail I sent him (also included) this morning before I decided to try and call him today.
Greetings John, We are very credible in the industry and the only suspicious things being said are in the chat rooms. The only participants that create a bad attitude are those that wish to profit from it. They buy low and then sell off as soon as it rises. The finale to this adventure shall be proof enough. The necessary filing will DEFINITELY be made.
De : John Harrell [mailto:chikhat*hotmail.com] Envoyé : 9 mai, 2006 12:54 À : gparkin*auruscorp.com Objet : CREDIBILITY ..... AURC ...
I hope you guys are planning on saying or doing something to address the issue of credibility. Right now there are many many people declaring that both AURC and NDOL are total scams. This doesn't sit well with us current investors. How about an SEC filing backing up what you are saying ? Thank you kindly."
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But just wondering, why would you still be interested in holding this stock? And your even want to buy some more???
I'm not a gold mining expert..., but correct me if I'm wrong, I know that usually a seller of a product would not disclose any negative info about the product they're selling. It would be strange for AURC to post their vein info. along with their total assets if someone's not interested. Also, did they also mention on the website that gold production is cheaper there than in some of other places such as South Africa? I wonder why their would have a top audit firm and a famous geologist working with them if there's not some great potential there.. Just some thoughts...
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I think there's potential. And I think it's undervalued. I just don't think it's $15 undervalued. I couldn't even wager a guess on what it should be. It's less than $15, but it's certainly more than $0.40 as well.
I'm also speculating on a good geological report. If there's a 10g/ton vein in there somewhere, this stock will skyrocket.
As for the "negative info" on their site -- it's not all negative. It's just that Gold isn't the positive, but it's what people focus on since the amounts of Gold are significant, even if it's spread too thin to do a whole lot of good. And it's probably why AURC doesn't do well even when Gold goes up.
Perhaps it's strongest assets are in fact Silver and Zinc. It's silver veins are pretty rich -- in the neighborhood of 20g/ton.
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quote:Originally posted by Fuzzy1018: I opened a new account with choicetrade last friday, can someone tell me when i'll b able to trade? sorry for being of the topic thanks
ETrade is an INSTANT fund avail. You can buy instantly and sell, but they give the "warning" about selling with uncleared funds.
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