Friday, September 10, 2010

Nice resource for calculating Century's Upside

Hey guys,
My first member post. Forgive me if some of this is repetitive and basic, but I think some of the viewers will still benefit.

Not sure if others have already seen this. I know most of you have already seen the comparison study on
goldminerpulse that show's Dennis' interpretation of how undervalued we are against peers. (10X cheaper than Agnico Eagle with higher grade)

Most of us also read PO5s recent comparison study list, which was very eye opening as to our potential once we get going and are taken seriously as a emerging mid-tier.

Just wanted to also mention, there is an additional resource I found to calculate metals leverage that is not very well known and quite useful. It is on shareknow.net

The specific link on Century Mining is here

This is a free resource where you can type in any Canadian Miner and it shows all the projects by mine and resources and then automatically calculates the total value of the company based on ounces in the ground.

It then gives each miner a leverage ratio (they call it "RI Quotient") which is net company value vs. current valuation.

To do this, you have to click on the "accept terms and condition" button and then click calculate.

They also attempt to calculate the leverage AFTER operating expenses in their second tab, but I find this to be less accurate due and filled with errors due to incorrect data so I rarely use it.

Century Mining is currently trading at a
RIDICULOUS RI Quotient of just under 50. Meaning essentially, we are priced at 1/50th of our proven resources.

This is the highest leverage of almost all producers they track. Many companies with NO PRODUCTION AT ALL have ratios of around 50 or LOWER. Some producers you will find with no production and no near term plans for construction have ratios around ours too!

The only companies I have found that have higher ratios have resources that have political opposition against them so they may never get developed (Like Revett.)

Many of our competitors have RI Quotients between
8-15. (Claude Resources is a 15, Osisko a 5 ) Some even 3-8! (Endeavour Silver is a 3) Feel free to play around and input any name and you'll see what I mean.

Our proven 43-101 compliant gold in the ground is currently worth just under worth
7 billion and this will vastly grow when new Bedard Dyke results get added to our 43-101.

The point is, even though it's frustrating that were going through this production ramp-up, it's important to keep in mind the tremendous inevitable upside from here.

The street has priced us as if the Gold is just in the ground and that's it. This has to change as we ramp up and go through these growing pains.

I believe this can easily be one of the top performing mining equities starting from these levels over the next couple years. While we may be outperformed on a daily and weekly and monthly basis - ultimately, when we deliver, there will be more upside here.

3 comments:

bigjohn37 said...

Hi r_e,
Let me add my two-cents worth to the voice of others, and welcome you to the Blog.
I enjoyed reading your first post (as blog member). You bring a refreshing perspective to the unfolding CMM story. My gut feeling is that our steady upward move will commence very soon, and it will start with the appointment of the new CEO. GLTA.

real_economics said...

hey thx john
Yes, I agree with your gut feeling. A new reputable CEO and gradual improvement in grade and ounces produced per month will make it happen IMO.
RE

Wingfong said...

RE
The resource calculator is useful. Tks for the lead to this interesting tool. Cheers