I have a price target of $ 1.80 which is crazy so how about .90
I'm using Fortuna Silver as a model here because the management of Fortuna who are doing an excellent job of improving those operations and finding more ore are the same guys that run and control ATY and the numbers aren't as far apart as you might think inspite of a huge differance in market cap. Here's the beef :
Fortuna : 915,000 Tons per yr @ $ 170 per ton gross or approx $ 70 net = cash flow of
$ 65,000,000 divided by 125,000,000 shares outstanding = cash flow of $ 0.52 per share divided by the current share price of approx $ 3.50 gives a multiple of 6.7
Atico wants to ramp up throughput to 600 tons per day for 330 days per year = 198,000 tons @
$ 400 per ton or approx $ 300 per ton net = cash flow $ 59,000,000
I'm using cash costs of $ 100 and why not. Fortuna is actually a bit lower than that and Atico have a mill that is in very good shape and our grades are much much higher !
$ 59,000,000 cash flow divided by 52,000,000 shares outstanding = $ 1.14 cash flow per share X 6.7 ( same multiple as Fortuna ) = $ 7.60
Of course that looks crazy so lets presume that we will need to issue another 52,000,000 shares @ .50 to raise $ 25,000,000 to pay the $ 14,000,000 final payment and spend some money on upgrading the mill. We would now have 104,000,000 outstanding divided by the same cash flow of $ 56,000,000 = $0.54 cash flow per share X 6.7 = $ 3.60 per share .
Of course that still looks crazy so lets cut it in half again because the market is total crap and who cares if the Fortuna guys are modeling Atico after Fortuna, they actually have the expertice to do it and they are motivated because they own millions and millions of shares!
So my target is $ 1.80 but lets cut that in half again just for fun and call it .90
By the aweigh, My commodity pricing is $ 3.00 for CU and $ 1300 for AU.