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 Romarco Minerals (r.v)

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James Junkin



Male Number of posts : 8
Localisation : Calgary, Alberta
Registration date : 2008-06-24

PostSubject: Romarco Minerals (r.v)   Tue Sep 23, 2008 10:00 am

Share price: 0.16
Shares outstanding: 200 mil
Market Cap: 32 mil

Anyone now anything about this company?

Romarco Intercepts 37 m of 7.9 g/t & 55 m of 6 g/t at Haile
Tuesday September 23, 8:30 am ET

http://biz.yahoo.com/iw/080923/0436541.html

Quote :
Romarco Intercepts 37 m of 7.9 g/t & 55 m of 6 g/t at Haile
Tuesday September 23, 8:30 am ET


SPARKS, NV--(MARKET WIRE)--Sep 23, 2008 -- ROMARCO MINERALS INC. (CDNX:R.V - News) (the "Company") is pleased to announce assay results from several drill holes at the Haile Gold Mine, in South Carolina. All holes returned significant results which is typified by those from hole DDH 301, which returned a composite sequence of 37 meters of 7.9 g/t including a 21.7 meter intercept of 11.62 g/t. Hole DDH 305 returned a composite zone of 54.8 meters of 6.01 g/t gold including a 25.1 meter intercept of 10.77 g/t gold. All drill results are within the confines of the designed open pit but were not included in the recently release new resource estimate (see press release dated September 4, 2008). The current measured and indicated resource is 1.5 million ounces of gold (34.9 million tonnes at 1.34 g/t). There is an additional 678,630 of inferred resources (26 million tonnes at 0.81 g/t).
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jeanvaljean



Number of posts : 152
Registration date : 2007-10-23

PostSubject: Re: Romarco Minerals (r.v)   Tue Sep 23, 2008 7:16 pm

Would you have any cost of production estimates, JJ? I read up on the Haile mine, and it is a respectable deposit of gold.

I suppose I need the following:

1. Estimated Cost of Plant and Equipment

2. Cashflow from loan to build plant and equipment with the terms of the loan.

3. Variable cost of of each ounce of gold extracted as a percent of revenue.

4. Expected yearly revenues per year.

I would use a discount rate of some sort to get the value of the expected cash-flows. I use 10% (usually) over a ten year estimated life of the mine.
Once I get the discounted cashflows as an annuity with lump sum for capex, I can take the present value lump sum and divide by the share outstanding. I suppose I would ask mgt fro estimates on capex and the interest on the loan for capex. Baring that I would use industry averages. We can at least get the present value share value for the Haile project.

Example:

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=23705837&l=0&r=0&s=AGQ&t=LIST

Then again mgt could apportion fixed cost per AuEq with the variable cost making everything a fixed percentage of revenue. Anyway, I don't have enough information- in other words. Sorry if this seems too elementary.
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jeanvaljean



Number of posts : 152
Registration date : 2007-10-23

PostSubject: Re: Romarco Minerals (r.v)   Tue Sep 23, 2008 7:20 pm

I have thought of using 25% as discounting factor given the accelerated costs in recent years have been 25%. This would hurdle rate would prove a great many projects uneconomic. What do you think?
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James Junkin



Male Number of posts : 8
Localisation : Calgary, Alberta
Registration date : 2008-06-24

PostSubject: Re: Romarco Minerals (r.v)   Tue Sep 23, 2008 7:49 pm

Cash, Grass, or Ass!!! No-one rides for Free! lol! lol! lol!

I just dig 'em up, Better ask Bull the coroner What a Face

We are just getting everything ready, as we are heading to Mexico early in the AM.
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jeanvaljean



Number of posts : 152
Registration date : 2007-10-23

PostSubject: Re: Romarco Minerals (r.v)   Wed Sep 24, 2008 6:44 am

http://www.miningweekly.com/article.php?a_id=136159

Fine we'll assume a 26% profit margin as the industry average.

Gold Ounces in Deposit

In millions of oz
2,100
Assumes POG at $700 for outgoing years
$700.00
Profit Margin
Cite: Mining Weekly "Cool Down"
26.00%


Assume 10 year life of mine

Yearly Nominal Profit in thousands
38,220 K

Assume 10% hurdle rate

$234,845 K

$234,845,355
Shares Outstanding
200,000 K

$1.17 per share


Assume 25% hurdle rate
This takes into account inflation in the mining sector
But static POG at 700

$136,465

$0.68 per share

Find Gold's rate of return per ounce
over 2000 through 3rdQ 2008 year period

I'll get back to that later. But it seems good. This is just for one mine in the Carolina's.

Jeez, Sun Valley Gold, US Global investors, and Sprott is into this mine. Thanks. Have fun.


Last edited by jeanvaljean on Wed Sep 24, 2008 6:54 am; edited 2 times in total (Reason for editing : Open pit mine is different from other.)
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