Thanks @Wack. First, I just want to point out that the $800/oz...

Thanks @Wack.

First, I just want to point out that the $800/oz profit is a number purely plucked from thin air for discussion purposes, and I hope no one relies on it at all. I just wanted to show the kind of calculations people do.

It's possible that the company could get to $800/oz with some good, shallow resources and the conglomerates, but let's be clear on my view:

The AISC from the scoping study was $1200/oz, meaning the profit at the current gold price would be around $450/oz. Sensible profit forecasts for now should probably be based off that number.

Doing the same calculation as above, but with that number:

$450 x 100,000 = $45m
Net Profit After Tax (NPAT) =$31.5m
With a 10x multiple = $315m market cap

If we were to have 834m shares outstanding, that would be a share price of 37c.

You can see why the scoping study didn't really set the world on fire, given it was considering only 60,000 oz of production each year.....

Anyway, if you want to to talk about realistic price targets, that's what I'm looking at from what we know so far, and it's why I'm very interested to see what the PFS will show.

Production of more than 100,000 ozs and/or costs of less than $1200/oz are what I'm looking for to make it worthwhile.

The potential from the resource upgrade, new exploration and the conglomerates is hopefully that they can improve both of those numbers, which is where the economics really improve.

Getting to your specific question @Wack

"Now let's return to the metrics.
At a sp of 45c we have a mc of ~$187M
Why is it not possible to borrow 100% if we only need $100m with an annual potential profit of $350m.
That is a payback period of 3.5 months.
That is an IRR of 350%
If they were the metrics, who would not lend the funds based on that?"

Firstly there's a typo in my post

"In a few years, I think this company will be producing 100,000 oz's per annum, making a profit of $800/oz.
After tax, that will be $560m of annual profit.
Give that a 10x multiple (reasonable for a mining company) and we're talking about a $560m company.

The $560m annual profit should be $56m of annual profit. Then you apply the 10x multiple to get to $560m market cap.

So for the $500/oz profit figure you've used, annual profit after tax would be $35m, not $350m.

Which should probably explain why we wouldn't have 100% debt funding; even if we could get it, which I doubt, the payback period would be more than 3 years once interest was taken into account.

From a risk perspective, anything more than 50% debt funded normally makes me nervous. After all, the mine doesn't start up and produce at an annualised rate of 100,000 oz for a $500/oz profit from day 1. It takes months and months to get to that point. It may not even happen in the first year. Meanwhile, your interest payments still need to be met.....

Hope that makes sense.

Cheers