Gold Price + NES
A great post from stockhouse NES forum
We’re barely touching seasonal gold yet and gold is already skyrocketing to new highs and holding its ground on the many but brief and insignificant sell-offs.
I would be amazed if this wasn’t a $4 stock by year end but I’mastounded that the juniors have yet to catch on to any gains or even begiven respectable valuations. ATAC could potentially be a 20 millionounce junior over their 100 + km strike at Rau yet they trade below a$800 million market cap still. I think NES is a way better deal atthese prices don’t get me wrong, I’m just saying it’s unbelievable the dealsout there especially with the exploration upside possible.
Ialso hold some Perseus at just over $3 – PRU and it amazes me thevaluation there as well with a $1.3 billion market cap with over 5 M ozof gold and 200 k oz / y production starting this quarter. At $500~cash costs the earnings should be incredible – it’s easy math.. but anyways these seniorsand alike seem way too cheap in here but nice to see that AEM close andthe volumes on Barrick and others picking up heavily. TSX Gold Index still sitting at 390 roughly almost 15% from the all time high hit on December 7th 2010. Last I checked gold was trading at $1400/oz in December and is currently treading water conformtably in the $1725 + range looking for a new support range after the new record hit last night.
NES I think should be inthe mid $400 – $600 million market cap range by year end if TRR, CAN,ATC, TXG can share that space with respective market caps.
I’mthinking at least 2 Moz for the low grade with another 3 Moz in thebreccia but who knows what other discoveries we might be in store for between now and the Initial Resource.
At those metrics the market cap should be in the $750 million area or much higher, closer to $7 a share.
This isn’t a crazy valuation when you look at what was paid for Ventana when gold was trading $400 dollars lower in Colombia. Batista paid $1.5 billion for Ventana with 3.5 Moz at La Bodega + other discoveries.
That’s over $415 / oz acquisition value. So in those terms NES would be pricing in roughly 750,000 ounces, that’s easy in just the northern portion of the deposit with low grade bulk tonnage let alone even going near the breccia hits.
All the gold stocks – majors, juniors etc. together don’t even make up the market cap of Walmart which is amazing and truly shows how small a space the gold miners occupy regardless of the earnings potentials for these equities with gold’s recent ascent to new highs.
NES is a steal at these prices and once the majors get crowded money will spill into NES and compete for shares being locked up by smart money. 300,000 volume or less than $1 million dollars is nothing compared to the money flowing into plays like Kinross lately or any other stocks on the big board with values of $1 billion with over 8 million shares traded on K.
Majors don’t make new discoveries anymore, they buy new ones. Goldcorp could lock up the GGB with TXG and NES for $1 billion right now and take over the potential for 20 + million ounces between the jurisdiction as well as the whole land package besides Cayden. That is nowhere near fair market value unless gold’s only worth $50 / oz in the ground but high-grade plays like VEN in the past have shown us proof it’s much higher.
Thanks to Guest Contributor Taylor
