The Fed has finally revealed its true intentions: unlimited QEs. And unlike prior QEs, there's been no disclosure of sterilising this new round of money printing. Its intentions are so obvious, that even mainstream finance types are starting to see the writing on the wall..
And in the mean time, gold's gone up +$150 in a matter of weeks. It is consolidating in the $1760-1780 range. Is the next move a pull-back, or a blast off to new highs? Only time will tell..
However, its worth considering the implications for ATV if we have a blast off in gold to new highs. On my very crude numbers, the NPV of Touquoy (ATV's share) is ~80% higher at $2000 pog, and over 200% higher at $2500 pog (as compared to $1700 pog as the baseline assumption). Debt payback periods collapse under higher gold price assumptions too. In short, the project's fundamentals switch from being extremely favourable, to being heavenly.
Higher NPV, shorter debt payback, more debt/less equity. See what this does to value per share? See what this does to interested parties waiting to buy in on the final equity raising? They start doubting their plans..
And with a much higher share price, ATV can raise say $10m or so at very favourable terms (resulting in minimal dulution - say 3% to 10%) to ramp up exploration like we've never seen before to find the millions of ounces we know lie in the Meguma Terrane.
The flick is about to be switched. And i'm strapped in, ready for take-off.
PS. I am extremely bullish and biased towards ATV, so please do your own research!!
ATV Price at posting:
3.6¢ Sentiment: Buy Disclosure: Held
