"In a normal scenario (Australia) with a gold producer putting...

"In a normal scenario (Australia) with a gold producer putting out $25 million per annum of [net operating] cash flow, you would be looking at a market cap of $170-230 million.”

So for Medusa achieving AU$57 million pa FCF, mkt cap should be around $450 million or 3x present valuation with a PE of 6.6.
SP Target: 77c x 3 = $2.31

Medusa.
No of shares in issue: 207.8 million
Share price ASX 8/7/16: 77c
Mkt Cap: AU$160 million (US$120 million @ 0.75 conv)

Substantial Shareholders (as at 31 Mar 2016)
Ruffer LLP Group: 6.5%
Paradice Investment Management Pty Ltd: 5.9%
Dimensional Fund Advisors LP: 4.2%
52% of shares institutionally held

Co-O resources (30/6/2015): 3.5 million tonnes at an av grade of 10.2 g/t gold for a total 1.15 million oz.
Co-O reserves (30/6/2015): 1.8 million tonnes at an av grade of 7.33 g/t gold for a total 427,000 oz.
Bananghilig resources: Ind & Inf resource 24.5 Mt, 1.14 g/t, 1.4 M ozs
Valuation: US$100 per resource oz Co-O only, or $48 per resource oz incl Bananghilig.

Infrastructure upgrades underway at Co-O to increase production, resource and LOM
 Compelling high-grade expansion opportunities at Co-O
 Near-mine exploration opportunities

Gold price: $1,365
AISC: $970
FCF potential: US$400 per oz (US$43 million/year, AU$57 million/year)
Cash On Hand as at 31 Mar 2016: US$16.8M
Debt: no long term debt. s/t c. $5 million

Production 2015/16 FY guidance: 108k oz
Profit HY 2016 actual: $31.3 million (production 61k, av price $1109)
Earnings per share HY 2016 actual: US 15c (AU 20c)
EPS FY 2016 estimated av forecasts: US 26c (AU 34.5c) (H2 fewer oz 47k, but higher gold price c.$1215)
P/E estimated 2016: 2.2

US$1 = AU$1.33 conversion
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According to Brisbane-based industry number-cruncher Austex Mining, as of March 31 there were just 37 gold producing companies listed on the Australian Securities Exchange. Sure, there are foreign-owned producers in the country but, even so, that is quite a narrow base considering that Australia is the world’s second largest gold producer (after China).

What this means is that investors have a limited choice to ride the predicted coming gold recovery. Of those 37, only 10 are producing at an annualized rate of 160,000oz or more, so that limits the field even more.

Certainly, also, there are plenty of ASX-listed explorers but when gold is riding high you want to be on the horse that is actually pulling the yellow metal out of the ground and getting full advantage of the rising price.

And, also according to Austex, there are not all the many near-term new explorers. Only five new players were expected to be in operation over the past three months – but together they are expected to add only 200,000oz a year to Australia’s output.

More concerning is that Austex says it could see only one significant new entrant in the second half of 2016. Longer term, nine companies have indicated they will restart projects now under care and maintenance. “Five companies are suggesting 2017, but most lack the cash and market support at this time,” says the report.

http://investorintel.com/gold-preci...d-foundation-a-solid-base-in-uncertain-times/