Stock valuation : Gold exploration company

Company name
Share price $
Gold price A$ /oz
Yahoo share chart ASX website
Gold price US$ Gold price A$ AUDUSD

1. Market capitalization vs Reserves

Issued shares millions
Market Cap $ million

Ave. ore concentration g/t
Proven resource Kt => Koz => Value $ million
Inferred add. Kt => Koz => Value $ million

Total Moz => Value $ billion
Percent additional minerals value %

Ore depth m, Distance to infrastructure km, Availability water /10
Expected extraction cost $/oz
Comments


Guidelines: Prefer Market cap over 50 million, and significantly less than resource value. A deep resource implies high startup and extraction costs, exacerbated by remote location or lack of availability of water. Prefer Gold extraction cost below $1000/oz, ore concentraction greater than 2 g/t and a million oz gold.

2. Cashflow vs Drilling program success

Money in the bank $ million, $ /share
Annual budget $ million => rights call in years
Exploration budget $ million % of total budget
Exploration success $Found/$Spent
Months till production months
Comments
Guidelines: Prefer more than 50 percent of cashflow on productive exploration and more than 6 months till a rights call based on money in the bank and running costs. Hopefully finding more gold than spending on exploration.

3. Price chart

10 year low $ high $
Daily trading volume million => $ million, % of capital
Signs of accumulation/distribution /10 (such as volume spikes on lows/highs)
Guidelines: More than 1 % of issued shares very high trading volume. Expect signs of accumulation. Safer buy if near 10 year lows.

4. Directors

(a) Good names /10
b) They stay around /10
c) Hold stock /10
Guidelines: Prefer CEO not too old, a good track record, doesn't move too much and holds significant stock.

Summary


Overall rating: /10

Advice: (Buy/Sell/Hold)


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