Simple Rough Calculation, page-20

The analysis of the MOY production, margin and potential market cap is quite simple yet also effective in many ways. I like it. Good work, Wolfgangat.

Just some quick comments though to consider:

- The profit margin is probably a little too optimistic in that the gold sold less AISC is not quite enough. We have to consider also maintenance capital expenditure that may include mine development and purchase of PPE to maintain the mine. This will reduce the profit margin a bit. We can glean the maintenance capex looking at the Cash Flow Statement under Investing Cash Flows. Ignore exploration and evaluation expenditure that may be more on growth capex to expand on other projects.

- Even when a company has generated a profit margin for the period, they may also be expending cash over the period because of the capital expenditure. This extends from the previous point. And the cash balance is an important factor in the valuation of the company as the capital structure plus liquidity affects its risk profile, which in turn affects the company's perceived PE ration

- From my past experience investing in gold mining companies since 2013, I doubt that a company producing 100koz p.a. justifies a $700m market cap, even if the future gold price rises. This is because gold price rising will also follow with oil price rising, leading to higher AISC. I have found the gold-oil ratio to be a very good indicator on gold miners' operating cash flow and profit margins. You can find a more detailed discussion of this under "Valuation" in RSG. I posted a report of this based on my research.

I am positive about MOY in its current stage. They demonstrated they can convert resources to reserves even after mining depletion. They are mining rather high grades and the past days of high AISC seem to be over. I am on this caravan and quite happy to see it toddle along for a while longer before investors finally get it and start jumping on.