Stockhouse.com: Taking it to the street
3x to 4x Bagger Short-term
7/14/2012 2:09:14 PM  |  | 447 reads  | Post #31275326

If my resource calculation numbers are close and SPX comes out with a resource number in the 700,000 ounces range, we are probably looking at a 3 to 4 bagger here in the short-term. Here are 2 methods I have used to come up with this evaluation.

1. Many junior companies are being valued at around \$35 per ounce in the ground. So using this method the math looks like this:

35 x .7 million oz = \$24.5 million mkt. cap.

24.5 x .49 = \$12 million mkt cap

12 / 3.9(current cap @ .03 sp) = 3 bagger, or 9 cents stock price

2. I know of a Junior with 700,000 oz (half indicated, half inferred). This jr. has a current mkt cap of 24.57 at close on Friday. They own 75% of the play.

24.57/.75 = \$32.76 million mkt valuation of total resource

32.76 x .49 = \$16.05 million cap if SPX gets same valuation from mkt.

16.05/3.9(current cap @ .03 sp) = 4 bagger or 12 cents stock price

To see my resource calculation estimate for SPX, refer to this:

http://www.stockhouse.com/Blogs/ViewDetailedPost.aspx?p=134400