Saturday, July 27, 2013

What’s a Company’s Gold Worth?

January 31, 2010 by · Leave a Comment 

Louis James & Andrey Dashkov, Casey’s International Speculator

At any given time, there’s a single international spot price for an ounce of refined gold. Gold is priced in U.S. dollars: $1,076.50 per ounce as we go to press. But what about the gold an exploration or mining company has in the ground – how do we value that?

Given sufficient data, you can estimate a reasonable net present value (NPV) for a project and deduce what each of the company’s ounces should be worth. To do this, you need to know annual output of the proposed mine, proposed capital expenditures, energy and other costs, and many more things. For most deposits held by the junior companies we tend to follow, there’s just not enough data available (more…)

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